Do Hedge Funds Love Applied Industrial Technologies (AIT)?

Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30. What do these smart investors think about Applied Industrial Technologies (NYSE:AIT)?

Is Applied Industrial Technologies (NYSE:AIT) a healthy stock for your portfolio? The best stock pickers are taking a bearish view. The number of bullish hedge fund bets was trimmed by 4 in recent months. AIT was in 12 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with AIT holdings at the end of the previous quarter. 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 Core-Mark Holding Company, Inc. (NASDAQ:CORE), Sabra Health Care REIT Inc (NASDAQ:SBRA), and Compania de Minas Buenaventura SA (ADR) (NYSE:BVN) to gather more data points.

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Now, let’s take a look at the key action surrounding Applied Industrial Technologies (NYSE:AIT).

Hedge fund activity in Applied Industrial Technologies (NYSE:AIT)

At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of -25% from the second quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Chuck Royce’s Royce & Associates has the number one position in Applied Industrial Technologies (NYSE:AIT), worth close to $144.7 million, corresponding to 0.8% of its total 13F portfolio. Coming in second is Gotham Asset Management, managed by Joel Greenblatt, which holds a $16.3 million position; 0.2% of its 13F portfolio is allocated to the company. Other peers with similar optimism comprise Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management, and Tim Curro’s Value Holdings LP.

Seeing as Applied Industrial Technologies (NYSE:AIT) has faced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of funds that decided to sell off their full holdings by the end of the third quarter. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors dumped the largest position of the “upper crust” of funds monitored by Insider Monkey, totaling about $0.7 million in stock, and Peter Muller’s PDT Partners was right behind this move, as the fund dumped about $0.3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 4 funds by the end of the third quarter.

Let’s now review hedge fund activity in other stocks similar to Applied Industrial Technologies (NYSE:AIT). These stocks are Core-Mark Holding Company, Inc. (NASDAQ:CORE), Sabra Health Care REIT Inc (NASDAQ:SBRA), Compania de Minas Buenaventura SA (ADR) (NYSE:BVN), and Nexstar Broadcasting Group, Inc. (NASDAQ:NXST). This group of stocks’ market caps resemble AIT’s market cap.

As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $168 million, lower than the $182 million figure in AIT’s case. Nexstar Broadcasting Group, Inc. (NASDAQ:NXST) is the most popular stock in this table. On the other hand Compania de Minas Buenaventura SA (ADR) (NYSE:BVN) is the least popular one with only 7 bullish hedge fund positions. Applied Industrial Technologies (NYSE:AIT) 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 NXST might be a better candidate to consider a long position.