Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Amphenol Corporation (NYSE:APH)? The smart money sentiment can provide an answer to this question.
Is Amphenol Corporation going to take off soon? Money managers are getting more optimistic. The number of bullish hedge fund bets moved up by 3 in recent months. APH was in 26 hedge funds’ portfolios at the end of the third quarter of 2015. There were 23 hedge funds in our database with APH holdings at the end of the previous quarter. At the end of this article we will also compare APH to other stocks including Campbell Soup Company (NYSE:CPB), NetEase, Inc (ADR) (NASDAQ:NTES), and Endo Health Solutions Inc (NASDAQ:ENDP) to get a better sense of its popularity.
Follow Amphenol Corp (NYSE:APH)
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Keeping this in mind, we’re going to review the fresh action regarding Amphenol Corporation (NYSE:APH).
Hedge fund activity in Amphenol Corporation (NYSE:APH)
At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Select Equity Group, managed by Robert Joseph Caruso, holds the number one position in Amphenol Corporation (NYSE:APH). Select Equity Group has a $224.9 million position in the stock, comprising 2.1% of its 13F portfolio. The second largest stake is held by Ken Griffin of Citadel Investment Group, with a $41.3 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism contain David Harding’s Winton Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Jim Simons’s Renaissance Technologies.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, created the biggest position in Amphenol Corporation (NYSE:APH). Renaissance Technologies had $21.4 million invested in the company at the end of the quarter. Jacob Gottlieb’s Visium Asset Management also made a $4.8 million investment in the stock during the quarter. The other funds with new positions in the stock are John Overdeck and David Siegel’s Two Sigma Advisors, Dmitry Balyasny’s Balyasny Asset Management, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s check out hedge fund activity in other stocks similar to Amphenol Corporation (NYSE:APH). We will take a look at Campbell Soup Company (NYSE:CPB), NetEase, Inc (ADR) (NASDAQ:NTES), Endo Health Solutions Inc (NASDAQ:ENDP), and Dollar Tree, Inc. (NASDAQ:DLTR). This group of stocks’ market valuations are similar to APH’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CPB | 25 | 146622 | 5 |
| NTES | 26 | 2385050 | -10 |
| ENDP | 61 | 4133074 | -6 |
| DLTR | 52 | 3273014 | -8 |
As you can see these stocks had an average of 41 hedge funds with bullish positions and the average amount invested in these stocks was $2,484 million. That figure was $433 million in APH’s case. Endo Health Solutions Inc (NASDAQ:ENDP) is the most popular stock in this table. On the other hand Campbell Soup Company (NYSE:CPB) is the least popular one with only 25 bullish hedge fund positions. Amphenol Corporation (NYSE:APH) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ENDP might be a better candidate to consider a long position.
