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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 873 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 30th holdings, data that is available nowhere else. Should you consider Avnet, Inc. (NYSE:AVT) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Avnet, Inc. (NYSE:AVT) was in 28 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 33. AVT has experienced an increase in hedge fund sentiment recently. There were 27 hedge funds in our database with AVT holdings at the end of March. Our calculations also showed that AVT isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
To most market participants, hedge funds are viewed as unimportant, old financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open at present, Our researchers choose to focus on the crème de la crème of this group, approximately 850 funds. Most estimates calculate that this group of people orchestrate bulk of the hedge fund industry's total capital, and by observing their inimitable equity investments, Insider Monkey has formulated many investment strategies that have historically outpaced the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Bernard Horn of Polaris Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we're going to view the fresh hedge fund action regarding Avnet, Inc. (NYSE:AVT).
Do Hedge Funds Think AVT Is A Good Stock To Buy Now?
At Q2's end, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AVT over the last 24 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Avnet, Inc. (NYSE:AVT) was held by Pzena Investment Management, which reported holding $501.3 million worth of stock at the end of June. It was followed by Arrowstreet Capital with a $48.8 million position. Other investors bullish on the company included Royce & Associates, AQR Capital Management, and Polaris Capital Management. In terms of the portfolio weights assigned to each position Atlantic Investment Management allocated the biggest weight to Avnet, Inc. (NYSE:AVT), around 9.99% of its 13F portfolio. Pzena Investment Management is also relatively very bullish on the stock, earmarking 1.95 percent of its 13F equity portfolio to AVT.
With a general bullishness amongst the heavyweights, some big names were leading the bulls' herd. AlphaCrest Capital Management, managed by Mika Toikka, established the biggest position in Avnet, Inc. (NYSE:AVT). AlphaCrest Capital Management had $1.6 million invested in the company at the end of the quarter. Noam Gottesman's GLG Partners also initiated a $0.6 million position during the quarter. The other funds with brand new AVT positions are David Harding's Winton Capital Management, Qing Li's Sciencast Management, and Matthew Hulsizer's PEAK6 Capital Management.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Avnet, Inc. (NYSE:AVT) but similarly valued. These stocks are Sabre Corporation (NASDAQ:SABR), Hecla Mining Company (NYSE:HL), BankUnited Inc (NYSE:BKU), Physicians Realty Trust (NYSE:DOC), Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), First Majestic Silver Corp (NYSE:AG), and Enable Midstream Partners LP (NYSE:ENBL). This group of stocks' market caps resemble AVT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SABR,37,972156,-3 HL,20,102393,4 BKU,13,140284,4 DOC,16,63892,-3 IOVA,30,1666448,-7 AG,11,39579,-4 ENBL,3,22671,-3 Average,18.6,429632,-1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.6 hedge funds with bullish positions and the average amount invested in these stocks was $430 million. That figure was $817 million in AVT's case. Sabre Corporation (NASDAQ:SABR) is the most popular stock in this table. On the other hand Enable Midstream Partners LP (NYSE:ENBL) is the least popular one with only 3 bullish hedge fund positions. Avnet, Inc. (NYSE:AVT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AVT is 68.2. 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 positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th and beat the market again by 4.5 percentage points. Unfortunately AVT wasn't nearly as popular as these 5 stocks and hedge funds that were betting on AVT were disappointed as the stock returned -5.9% since the end of June (through 10/15) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.