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 first 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 4.5 years and analyze what the smart money thinks of Advanced Energy Industries, Inc. (NASDAQ:AEIS) based on that data.
Advanced Energy Industries, Inc. (NASDAQ:AEIS) shareholders have witnessed a decrease in hedge fund interest recently. AEIS was in 14 hedge funds' portfolios at the end of March. There were 20 hedge funds in our database with AEIS positions at the end of the previous quarter. Our calculations also showed that AEIS isn't among the 30 most popular stocks among hedge funds (click for Q1 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 58 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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_26335" align="aligncenter" width="400"] Ken Fisher of Fisher Asset Management[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology's influence will go beyond online payments. So, we are checking out this futurist's moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to take a glance at the key hedge fund action surrounding Advanced Energy Industries, Inc. (NASDAQ:AEIS).
What have hedge funds been doing with Advanced Energy Industries, Inc. (NASDAQ:AEIS)?
Heading into the second quarter of 2020, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -30% from the previous quarter. By comparison, 17 hedge funds held shares or bullish call options in AEIS a year ago. With hedge funds' sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
The largest stake in Advanced Energy Industries, Inc. (NASDAQ:AEIS) was held by Royce & Associates, which reported holding $16.3 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $16.1 million position. Other investors bullish on the company included Fisher Asset Management, D E Shaw, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to Advanced Energy Industries, Inc. (NASDAQ:AEIS), around 0.22% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, designating 0.15 percent of its 13F equity portfolio to AEIS.
Since Advanced Energy Industries, Inc. (NASDAQ:AEIS) has experienced falling interest from hedge fund managers, logic holds that there exists a select few fund managers who sold off their full holdings by the end of the first quarter. Interestingly, Charles Clough's Clough Capital Partners cut the largest investment of all the hedgies tracked by Insider Monkey, totaling about $7.3 million in stock, and Noam Gottesman's GLG Partners was right behind this move, as the fund said goodbye to about $6.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 6 funds by the end of the first quarter.
Let's go over hedge fund activity in other stocks similar to Advanced Energy Industries, Inc. (NASDAQ:AEIS). We will take a look at Casella Waste Systems Inc. (NASDAQ:CWST), Dicks Sporting Goods Inc (NYSE:DKS), Compania de Minas Buenaventura SA (NYSE:BVN), and Colliers International Group Inc (NASDAQ:CIGI). This group of stocks' market values are closest to AEIS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CWST,16,147998,6 DKS,27,180902,1 BVN,9,55975,-4 CIGI,10,437647,-3 Average,15.5,205631,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $206 million. That figure was $59 million in AEIS's case. Dicks Sporting Goods Inc (NYSE:DKS) is the most popular stock in this table. On the other hand Compania de Minas Buenaventura SA (NYSE:BVN) is the least popular one with only 9 bullish hedge fund positions. Advanced Energy Industries, Inc. (NASDAQ:AEIS) is not the least popular stock in this group but hedge fund interest is still below average. 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 13.3% in 2020 through June 25th and still beat the market by 16.8 percentage points. A small number of hedge funds were also right about betting on AEIS as the stock returned 36.4% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.