Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the second quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of AptarGroup, Inc. (NYSE:ATR) based on that data and determine whether they were really smart about the stock.
Is AptarGroup, Inc. (NYSE:ATR) a buy here? Investors who are in the know were in an optimistic mood. The number of long hedge fund bets moved up by 6 recently. AptarGroup, Inc. (NYSE:ATR) was in 26 hedge funds' portfolios at the end of June. The all time high for this statistics is 25. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ATR isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Donald Sussman of Paloma Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Keeping this in mind let's take a glance at the recent hedge fund action encompassing AptarGroup, Inc. (NYSE:ATR).
Hedge fund activity in AptarGroup, Inc. (NYSE:ATR)
At the end of June, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 30% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in ATR over the last 20 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
The largest stake in AptarGroup, Inc. (NYSE:ATR) was held by Citadel Investment Group, which reported holding $49.5 million worth of stock at the end of September. It was followed by Adage Capital Management with a $42 million position. Other investors bullish on the company included Armistice Capital, Royce & Associates, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Sabrepoint Capital allocated the biggest weight to AptarGroup, Inc. (NYSE:ATR), around 2.87% of its 13F portfolio. Armistice Capital is also relatively very bullish on the stock, designating 1.41 percent of its 13F equity portfolio to ATR.
As industrywide interest jumped, some big names have jumped into AptarGroup, Inc. (NYSE:ATR) headfirst. Sirios Capital Management, managed by John Brennan, created the most valuable position in AptarGroup, Inc. (NYSE:ATR). Sirios Capital Management had $5 million invested in the company at the end of the quarter. Donald Sussman's Paloma Partners also made a $1.2 million investment in the stock during the quarter. The other funds with brand new ATR positions are Brandon Haley's Holocene Advisors, David Harding's Winton Capital Management, and Ray Dalio's Bridgewater Associates.
Let's now take a look at hedge fund activity in other stocks similar to AptarGroup, Inc. (NYSE:ATR). These stocks are Companhia de Saneamento Basico (NYSE:SBS), WEX Inc (NYSE:WEX), Five9 Inc (NASDAQ:FIVN), Chemed Corporation (NYSE:CHE), Arch Coal Inc (NYSE:ACI), Ascendis Pharma A/S (NASDAQ:ASND), and JOYY Inc. (NASDAQ:YY). This group of stocks' market caps resemble ATR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SBS,10,270233,2 WEX,24,399174,-11 FIVN,44,1130157,11 CHE,26,351128,1 ACI,30,2773996,30 ASND,31,2509539,-2 YY,28,585906,13 Average,27.6,1145733,6.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.6 hedge funds with bullish positions and the average amount invested in these stocks was $1146 million. That figure was $211 million in ATR's case. Five9 Inc (NASDAQ:FIVN) is the most popular stock in this table. On the other hand Companhia de Saneamento Basico (NYSE:SBS) is the least popular one with only 10 bullish hedge fund positions. AptarGroup, Inc. (NYSE:ATR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ATR is 63.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 21.3% in 2020 through September 25th and surpassed the market by 17.7 percentage points. Unfortunately ATR wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); ATR investors were disappointed as the stock returned 0.4% since Q2 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Get real-time email alerts: Follow Aptargroup Inc (NYSE:ATR)
Disclosure: None. This article was originally published at Insider Monkey.