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We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Allegheny Technologies Incorporated (NYSE:ATI) based on that data.
Allegheny Technologies Incorporated (NYSE:ATI) was in 26 hedge funds' portfolios at the end of the first quarter of 2020. ATI investors should pay attention to a decrease in activity from the world's largest hedge funds of late. There were 27 hedge funds in our database with ATI positions at the end of the previous quarter. Our calculations also showed that ATI 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.
According to most investors, hedge funds are perceived as worthless, old financial vehicles of years past. While there are over 8000 funds in operation at the moment, Our experts choose to focus on the bigwigs of this club, around 850 funds. These hedge fund managers watch over the lion's share of the smart money's total capital, and by shadowing their best picks, Insider Monkey has come up with numerous investment strategies that have historically defeated the S&P 500 index. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points annually 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 .
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Ken Fisher of Fisher Asset Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to take a peek at the new hedge fund action encompassing Allegheny Technologies Incorporated (NYSE:ATI).
How are hedge funds trading Allegheny Technologies Incorporated (NYSE:ATI)?
At Q1's end, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from one quarter earlier. On the other hand, there were a total of 25 hedge funds with a bullish position in ATI a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, D. E. Shaw's D E Shaw has the most valuable position in Allegheny Technologies Incorporated (NYSE:ATI), worth close to $15.3 million, corresponding to less than 0.1%% of its total 13F portfolio. The second largest stake is held by Water Street Capital, managed by Gilchrist Berg, which holds a $11.6 million position; 1.3% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish consist of Ken Fisher's Fisher Asset Management, Ken Griffin's Citadel Investment Group and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Mountaineer Partners Management allocated the biggest weight to Allegheny Technologies Incorporated (NYSE:ATI), around 4.09% of its 13F portfolio. Water Street Capital is also relatively very bullish on the stock, designating 1.27 percent of its 13F equity portfolio to ATI.
Due to the fact that Allegheny Technologies Incorporated (NYSE:ATI) has witnessed falling interest from the aggregate hedge fund industry, we can see that there is a sect of funds that elected to cut their positions entirely last quarter. Intriguingly, Brandon Haley's Holocene Advisors cut the largest position of the 750 funds monitored by Insider Monkey, comprising an estimated $3.7 million in stock, and Noam Gottesman's GLG Partners was right behind this move, as the fund said goodbye to about $1.6 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds last quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Allegheny Technologies Incorporated (NYSE:ATI) but similarly valued. These stocks are Acadia Realty Trust (NYSE:AKR), S & T Bancorp Inc (NASDAQ:STBA), Amneal Pharmaceuticals, Inc. (NYSE:AMRX), and Air Transport Services Group Inc. (NASDAQ:ATSG). This group of stocks' market valuations resemble ATI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AKR,14,31992,1 STBA,4,3076,-5 AMRX,7,4326,-3 ATSG,22,116281,2 Average,11.75,38919,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $95 million in ATI's case. Air Transport Services Group Inc. (NASDAQ:ATSG) is the most popular stock in this table. On the other hand S & T Bancorp Inc (NASDAQ:STBA) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Allegheny Technologies Incorporated (NYSE:ATI) is more popular among hedge funds. 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. Unfortunately ATI wasn't nearly as popular as these 10 stocks and hedge funds that were betting on ATI were disappointed as the stock returned 2.1% during the second quarter (through the end of May) 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 in 2020.
Disclosure: None. This article was originally published at Insider Monkey.