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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 AAON, Inc. (NASDAQ:AAON) based on that data and determine whether they were really smart about the stock.
Is AAON, Inc. (NASDAQ:AAON) going to take off soon? Prominent investors were becoming hopeful. The number of bullish hedge fund positions went up by 4 lately. Our calculations also showed that AAON 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). AAON was in 11 hedge funds' portfolios at the end of the first quarter of 2020. There were 7 hedge funds in our database with AAON positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are a large number of signals shareholders use to evaluate publicly traded companies. Two of the most under-the-radar signals are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the elite hedge fund managers can outperform the market by a superb margin (see the details here).
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Dmitry Balyasny of Balyasny Asset Management[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a "weekend trading strategy", so we look into his strategy's picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller's investor letter. 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 check out the fresh hedge fund action surrounding AAON, Inc. (NASDAQ:AAON).
What have hedge funds been doing with AAON, Inc. (NASDAQ:AAON)?
At Q1's end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 57% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AAON over the last 18 quarters. With hedgies' capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
More specifically, Millennium Management was the largest shareholder of AAON, Inc. (NASDAQ:AAON), with a stake worth $7.6 million reported as of the end of September. Trailing Millennium Management was Winton Capital Management, which amassed a stake valued at $5 million. Balyasny Asset Management, Marshall Wace LLP, and D E Shaw 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 Winton Capital Management allocated the biggest weight to AAON, Inc. (NASDAQ:AAON), around 0.13% of its 13F portfolio. Tudor Investment Corp is also relatively very bullish on the stock, designating 0.03 percent of its 13F equity portfolio to AAON.
As industrywide interest jumped, some big names were leading the bulls' herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the biggest position in AAON, Inc. (NASDAQ:AAON). Marshall Wace LLP had $2.1 million invested in the company at the end of the quarter. D. E. Shaw's D E Shaw also made a $1.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Matthew Hulsizer's PEAK6 Capital Management, and Paul Tudor Jones's Tudor Investment Corp.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as AAON, Inc. (NASDAQ:AAON) but similarly valued. We will take a look at Spirit AeroSystems Holdings, Inc. (NYSE:SPR), First Horizon National Corporation (NYSE:FHN), MasTec, Inc. (NYSE:MTZ), and AutoNation, Inc. (NYSE:AN). This group of stocks' market caps resemble AAON's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SPR,38,745596,-10 FHN,31,242866,4 MTZ,24,99669,-17 AN,27,256418,-4 Average,30,336137,-6.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $336 million. That figure was $24 million in AAON's case. Spirit AeroSystems Holdings, Inc. (NYSE:SPR) is the most popular stock in this table. On the other hand MasTec, Inc. (NYSE:MTZ) is the least popular one with only 24 bullish hedge fund positions. Compared to these stocks AAON, Inc. (NASDAQ:AAON) is even less popular than MTZ. Hedge funds dodged a bullet by taking a bearish stance towards AAON. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but managed to beat the market by 15.5 percentage points. Unfortunately AAON wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); AAON investors were disappointed as the stock returned 12.7% during the second quarter 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 so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.