Is Ichor Holdings Ltd. (NASDAQ:ICHR) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Ichor Holdings Ltd. (NASDAQ:ICHR) was in 10 hedge funds' portfolios at the end of the first quarter of 2019. ICHR has experienced an increase in hedge fund sentiment lately. There were 7 hedge funds in our database with ICHR holdings at the end of the previous quarter. Our calculations also showed that ICHR isn't among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (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 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to analyze the latest hedge fund action regarding Ichor Holdings Ltd. (NASDAQ:ICHR).
What does smart money think about Ichor Holdings Ltd. (NASDAQ:ICHR)?
At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 43% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ICHR over the last 15 quarters. With hedgies' capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Impax Asset Management, managed by Ian Simm, holds the number one position in Ichor Holdings Ltd. (NASDAQ:ICHR). Impax Asset Management has a $18.5 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund manager is Chuck Royce of Royce & Associates, with a $14.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Steve Cohen's Point72 Asset Management, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and Matthew Hulsizer's PEAK6 Capital Management.
As aggregate interest increased, some big names were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the most outsized position in Ichor Holdings Ltd. (NASDAQ:ICHR). Arrowstreet Capital had $4.6 million invested in the company at the end of the quarter. Matthew Hulsizer's PEAK6 Capital Management also made a $1.9 million investment in the stock during the quarter. The following funds were also among the new ICHR investors: Mike Vranos's Ellington, Ken Griffin's Citadel Investment Group, and Matthew Hulsizer's PEAK6 Capital Management.
Let's now review hedge fund activity in other stocks similar to Ichor Holdings Ltd. (NASDAQ:ICHR). These stocks are Collegium Pharmaceutical Inc (NASDAQ:COLL), Ciner Resources LP (NYSE:CINR), Assembly Biosciences Inc (NASDAQ:ASMB), and Barings BDC, Inc. (NYSE:BBDC). This group of stocks' market caps are similar to ICHR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position COLL,20,87240,7 CINR,1,6943,-1 ASMB,19,132468,1 BBDC,12,17484,2 Average,13,61034,2.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. That figure was $54 million in ICHR's case. Collegium Pharmaceutical Inc (NASDAQ:COLL) is the most popular stock in this table. On the other hand Ciner Resources LP (NYSE:CINR) is the least popular one with only 1 bullish hedge fund positions. Ichor Holdings Ltd. (NASDAQ:ICHR) is not the least popular stock in this group but hedge fund interest is still below average. 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ICHR wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ICHR investors were disappointed as the stock returned 2.4% during the same time period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.