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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of The ExOne Company (NASDAQ:XONE).
The ExOne Company (NASDAQ:XONE) has seen an increase in support from the world's most elite money managers lately. The ExOne Company (NASDAQ:XONE) was in 5 hedge funds' portfolios at the end of September. The all time high for this statistics is 6. There were 2 hedge funds in our database with XONE holdings at the end of June. Our calculations also showed that XONE isn't among the 30 most popular stocks among hedge funds (click for Q3 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 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 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Gavin Saitowitz of Prelude Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. With all of this in mind we're going to take a look at the new hedge fund action regarding The ExOne Company (NASDAQ:XONE).
How have hedgies been trading The ExOne Company (NASDAQ:XONE)?
At third quarter's end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 150% from the previous quarter. By comparison, 4 hedge funds held shares or bullish call options in XONE a year ago. With hedgies' capital changing hands, there exists a few notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
The largest stake in The ExOne Company (NASDAQ:XONE) was held by Renaissance Technologies, which reported holding $1.3 million worth of stock at the end of September. It was followed by Millennium Management with a $1.2 million position. Other investors bullish on the company included Arrowstreet Capital, Citadel Investment Group, and D E Shaw. In terms of the portfolio weights assigned to each position Millennium Management allocated the biggest weight to The ExOne Company (NASDAQ:XONE), around 0.0015% of its 13F portfolio. Arrowstreet Capital is also relatively very bullish on the stock, setting aside 0.0013 percent of its 13F equity portfolio to XONE.
With a general bullishness amongst the heavyweights, key money managers have jumped into The ExOne Company (NASDAQ:XONE) headfirst. Renaissance Technologies, managed by Jim Simons (founder), initiated the largest position in The ExOne Company (NASDAQ:XONE). Renaissance Technologies had $1.3 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $1.2 million investment in the stock during the quarter. The other funds with brand new XONE positions are Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and Gavin Saitowitz and Cisco J. del Valle's Prelude Capital (previously Springbok Capital).
Let's also examine hedge fund activity in other stocks similar to The ExOne Company (NASDAQ:XONE). We will take a look at Summit Therapeutics Inc. (NASDAQ:SMMT), Hometrust Bancshares Inc (NASDAQ:HTBI), Gladstone Capital Corporation (NASDAQ:GLAD), Alta Equipment Group Inc. (NYSE:ALTG), Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA), CyberOptics Corporation (NASDAQ:CYBE), and Pioneer Bancorp, Inc. (NASDAQ:PBFS). This group of stocks' market caps resemble XONE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SMMT,1,1044,-2 HTBI,11,38106,-1 GLAD,3,3304,-1 ALTG,13,35500,-3 LTRPA,20,32328,-2 CYBE,9,19886,0 PBFS,2,2164,-1 Average,8.4,18905,-1.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.4 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $4 million in XONE's case. Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA) is the most popular stock in this table. On the other hand Summit Therapeutics PLC (NASDAQ:SMMT) is the least popular one with only 1 bullish hedge fund positions. The ExOne Company (NASDAQ:XONE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for XONE is 43.5. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and surpassed the market again by 16.1 percentage points. Unfortunately XONE wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); XONE investors were disappointed as the stock returned 4% since the end of September (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.