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Were These Hedge Funds Right About Piling Into ASML Holding N.V. (ASML)?

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  • ASML

The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards ASML Holding N.V. (NASDAQ:ASML).

Is ASML Holding N.V. (NASDAQ:ASML) a great investment today? The best stock pickers were in a bullish mood. The number of bullish hedge fund positions advanced by 9 in recent months. ASML Holding N.V. (NASDAQ:ASML) was in 44 hedge funds' portfolios at the end of June. The all time high for this statistic was previously 35. This means the bullish number of hedge fund positions in this stock currently sits at its all new time high. Our calculations also showed that ASML isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Peter Rathjens Arrowstreet Capital 394
Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, 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. With all of this in mind we're going to take a glance at the latest hedge fund action encompassing ASML Holding N.V. (NASDAQ:ASML).

Do Hedge Funds Think ASML Is A Good Stock To Buy Now?

At second quarter's end, a total of 44 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 26% from one quarter earlier. By comparison, 25 hedge funds held shares or bullish call options in ASML a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).

More specifically, Fisher Asset Management was the largest shareholder of ASML Holding N.V. (NASDAQ:ASML), with a stake worth $2800.2 million reported as of the end of June. Trailing Fisher Asset Management was Arrowstreet Capital, which amassed a stake valued at $456.3 million. Citadel Investment Group, Citadel Investment Group, 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 Breakline Capital allocated the biggest weight to ASML Holding N.V. (NASDAQ:ASML), around 9.33% of its 13F portfolio. Unio Capital is also relatively very bullish on the stock, setting aside 4.32 percent of its 13F equity portfolio to ASML.

Consequently, key hedge funds have jumped into ASML Holding N.V. (NASDAQ:ASML) headfirst. OZ Management, managed by Daniel S. Och, created the biggest position in ASML Holding N.V. (NASDAQ:ASML). OZ Management had $124 million invested in the company at the end of the quarter. Brandon Haley's Holocene Advisors also initiated a $54.9 million position during the quarter. The following funds were also among the new ASML investors: Rajiv Jain's GQG Partners, Michael Rockefeller and KarláKroeker's Woodline Partners, and Leon Shaulov's Maplelane Capital.

Let's go over hedge fund activity in other stocks similar to ASML Holding N.V. (NASDAQ:ASML). We will take a look at Adobe Inc. (NASDAQ:ADBE), Exxon Mobil Corporation (NYSE:XOM), Comcast Corporation (NASDAQ:CMCSA), Toyota Motor Corporation (NYSE:TM), NIKE, Inc. (NYSE:NKE), Netflix, Inc. (NASDAQ:NFLX), and The Coca-Cola Company (NYSE:KO). This group of stocks' market caps are closest to ASML's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ADBE,89,13101408,-18 XOM,68,3698096,3 CMCSA,84,9300743,-4 TM,12,903060,-6 NKE,67,6425093,-11 NFLX,113,13216589,3 KO,62,24965786,1 Average,70.7,10230111,-4.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 70.7 hedge funds with bullish positions and the average amount invested in these stocks was $10230 million. That figure was $4323 million in ASML's case. Netflix, Inc. (NASDAQ:NFLX) is the most popular stock in this table. On the other hand Toyota Motor Corporation (NYSE:TM) is the least popular one with only 12 bullish hedge fund positions. ASML Holding N.V. (NASDAQ:ASML) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ASML is 55.8. 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. 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 29.6% in 2021 through November 5th and still beat the market by 3.1 percentage points. A small number of hedge funds were also right about betting on ASML as the stock returned 22.9% since the end of the second quarter (through 11/5) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.