Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Aptiv PLC (NYSE:APTV) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Aptiv PLC (NYSE:APTV) was in 44 hedge funds’ portfolios at the end of September. The all time high for this statistic is 50. APTV investors should be aware of an increase in enthusiasm from smart money recently. There were 40 hedge funds in our database with APTV holdings at the end of June. Our calculations also showed that APTV isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Larry Robbins of Glenview 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 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. With all of this in mind let’s go over the fresh hedge fund action encompassing Aptiv PLC (NYSE:APTV).
Do Hedge Funds Think APTV Is A Good Stock To Buy Now?
At Q3’s end, a total of 44 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards APTV over the last 25 quarters. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
Among these funds, Impax Asset Management held the most valuable stake in Aptiv PLC (NYSE:APTV), which was worth $563.2 million at the end of the third quarter. On the second spot was Third Point which amassed $193.7 million worth of shares. Glenview Capital, Holocene Advisors, and Polar Capital 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 Caxton Associates LP allocated the biggest weight to Aptiv PLC (NYSE:APTV), around 9.88% of its 13F portfolio. Jade Capital Advisors is also relatively very bullish on the stock, earmarking 2.61 percent of its 13F equity portfolio to APTV.
Now, key money managers were breaking ground themselves. Candlestick Capital Management, managed by Jack Woodruff, assembled the largest position in Aptiv PLC (NYSE:APTV). Candlestick Capital Management had $61.8 million invested in the company at the end of the quarter. Zach Schreiber’s Point State Capital also made a $48.9 million investment in the stock during the quarter. The other funds with brand new APTV positions are Alexander Mitchell’s Scopus Asset Management, Michael Gelband’s ExodusPoint Capital, and Javier Velazquez’s Albar Capital.
Let’s now review hedge fund activity in other stocks similar to Aptiv PLC (NYSE:APTV). We will take a look at Baxter International Inc. (NYSE:BAX), SYSCO Corporation (NYSE:SYY), STMicroelectronics N.V. (NYSE:STM), Cintas Corporation (NASDAQ:CTAS), Marathon Petroleum Corp (NYSE:MPC), Alcon Inc. (NYSE:ALC), and Motorola Solutions Inc (NYSE:MSI). All of these stocks’ market caps are closest to APTV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BAX | 42 | 3485785 | -4 |
| SYY | 29 | 2245599 | -11 |
| STM | 11 | 49115 | -2 |
| CTAS | 36 | 781970 | 15 |
| MPC | 43 | 2688865 | -5 |
| ALC | 20 | 1263277 | -2 |
| MSI | 34 | 1266185 | -3 |
| Average | 30.7 | 1682971 | -1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.7 hedge funds with bullish positions and the average amount invested in these stocks was $1683 million. That figure was $1757 million in APTV’s case. Marathon Petroleum Corp (NYSE:MPC) is the most popular stock in this table. On the other hand STMicroelectronics N.V. (NYSE:STM) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Aptiv PLC (NYSE:APTV) is more popular among hedge funds. Our overall hedge fund sentiment score for APTV is 85.4. 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 and still beat the market by 3.6 percentage points. Unfortunately, APTV wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on APTV were disappointed as the stock returned -8.3% since the end of the third quarter (through 1/31) 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 all of these stocks already outperformed the market since 2019.
Follow Aptiv Plc (NYSE:APTV)
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Disclosure: None. This article was originally published at Insider Monkey.
