At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Intevac, Inc. (NASDAQ:IVAC).
Intevac, Inc. (NASDAQ:IVAC) was in 8 hedge funds' portfolios at the end of the first quarter of 2020. IVAC investors should pay attention to a decrease in activity from the world's largest hedge funds in recent months. There were 9 hedge funds in our database with IVAC positions at the end of the previous quarter. Our calculations also showed that IVAC 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.
To most investors, hedge funds are perceived as underperforming, old investment vehicles of the past. While there are more than 8000 funds with their doors open today, Our experts look at the aristocrats of this club, about 850 funds. Most estimates calculate that this group of people command the lion's share of the smart money's total asset base, and by paying attention to their unrivaled picks, Insider Monkey has discovered a number of investment strategies that have historically exceeded Mr. Market. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_339354" align="aligncenter" width="400"] Matthew Drapkin of Becker Drapkin Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. 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 let's take a look at the new hedge fund action encompassing Intevac, Inc. (NASDAQ:IVAC).
What have hedge funds been doing with Intevac, Inc. (NASDAQ:IVAC)?
At the end of the first quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards IVAC over the last 18 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Royce & Associates held the most valuable stake in Intevac, Inc. (NASDAQ:IVAC), which was worth $7.6 million at the end of the third quarter. On the second spot was Becker Drapkin Management which amassed $3.8 million worth of shares. Renaissance Technologies, Millennium Management, and Ancora Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Becker Drapkin Management allocated the biggest weight to Intevac, Inc. (NASDAQ:IVAC), around 5.44% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, earmarking 0.1 percent of its 13F equity portfolio to IVAC.
Because Intevac, Inc. (NASDAQ:IVAC) has faced bearish sentiment from the smart money, it's easy to see that there exists a select few fund managers who sold off their full holdings in the first quarter. It's worth mentioning that David Nguyen and Nancy Oh's One68 Global Capital dumped the biggest position of all the hedgies monitored by Insider Monkey, comprising an estimated $0.2 million in stock. Ari Zweiman's fund, 683 Capital Partners, also sold off its stock, about $0.2 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 1 funds in the first quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Intevac, Inc. (NASDAQ:IVAC) but similarly valued. We will take a look at Aptinyx Inc. (NASDAQ:APTX), Carrols Restaurant Group, Inc. (NASDAQ:TAST), Great Panther Mining Ltd (NYSE:GPL), and Roadrunner Transportation Systems Inc (NYSE:RRTS). This group of stocks' market values match IVAC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position APTX,10,24926,1 TAST,11,14256,-3 GPL,5,1963,1 RRTS,4,88085,1 Average,7.5,32308,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $16 million in IVAC's case. Carrols Restaurant Group, Inc. (NASDAQ:TAST) is the most popular stock in this table. On the other hand Roadrunner Transportation Systems Inc (NYSE:RRTS) is the least popular one with only 4 bullish hedge fund positions. Intevac, Inc. (NASDAQ:IVAC) is not the most popular stock in this group but hedge fund interest is still above 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 12.2% in 2020 through June 17th but still beat the market by 14.8 percentage points. Hedge funds were also right about betting on IVAC as the stock returned 40.3% in Q2 (through June 17th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.