We at Insider Monkey have gone over 752 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 September 30th. In this article, we look at what those funds think of Advanced Semiconductor Engineering (NYSE:ASX) based on that data.
Hedge fund interest in Advanced Semiconductor Engineering (NYSE:ASX) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Galapagos NV (NASDAQ:GLPG), PerkinElmer, Inc. (NYSE:PKI), and Kirkland Lake Gold Ltd. (NYSE:KL) to gather more data points. Our calculations also showed that ASX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s take a gander at the latest hedge fund action surrounding Advanced Semiconductor Engineering (NYSE:ASX).
How are hedge funds trading Advanced Semiconductor Engineering (NYSE:ASX)?
At Q3’s end, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 7 hedge funds with a bullish position in ASX 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.
When looking at the institutional investors followed by Insider Monkey, Ken Fisher’s Fisher Asset Management has the most valuable position in Advanced Semiconductor Engineering (NYSE:ASX), worth close to $151.9 million, accounting for 0.2% of its total 13F portfolio. The second most bullish fund manager is LMR Partners, managed by Ben Levine, Andrew Manuel and Stefan Renold, which holds a $32.2 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish consist of Renaissance Technologies, Ken Griffin’s Citadel Investment Group and David E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position LMR Partners allocated the biggest weight to Advanced Semiconductor Engineering (NYSE:ASX), around 1.59% of its 13F portfolio. Fisher Asset Management is also relatively very bullish on the stock, setting aside 0.17 percent of its 13F equity portfolio to ASX.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Two Sigma Advisors. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Stevens Capital Management).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Advanced Semiconductor Engineering (NYSE:ASX) but similarly valued. We will take a look at Galapagos NV (NASDAQ:GLPG), PerkinElmer, Inc. (NYSE:PKI), Kirkland Lake Gold Ltd. (NYSE:KL), and Lennox International Inc. (NYSE:LII). This group of stocks’ market caps are closest to ASX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GLPG | 13 | 142930 | -1 |
| PKI | 24 | 975011 | 0 |
| KL | 16 | 376065 | -5 |
| LII | 21 | 193706 | 0 |
| Average | 18.5 | 421928 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $422 million. That figure was $193 million in ASX’s case. PerkinElmer, Inc. (NYSE:PKI) is the most popular stock in this table. On the other hand Galapagos NV (NASDAQ:GLPG) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Advanced Semiconductor Engineering (NYSE:ASX) is even less popular than GLPG. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on ASX, though not to the same extent, as the stock returned 9.6% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
