After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Ichor Holdings, Ltd. (NASDAQ:ICHR).
Hedge fund interest in Ichor Holdings, Ltd. (NASDAQ:ICHR) 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 ADTRAN, Inc. (NASDAQ:ADTN), Resources Connection, Inc. (NASDAQ:RECN), and IGM Biosciences, Inc. (NASDAQ:IGMS) to gather more data points. Our calculations also showed that ICHR 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.
If you’d ask most market participants, hedge funds are perceived as underperforming, old investment tools of the past. While there are over 8000 funds in operation today, We choose to focus on the aristocrats of this group, about 750 funds. These hedge fund managers watch over the lion’s share of the smart money’s total asset base, and by monitoring their unrivaled equity investments, Insider Monkey has found a number of investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Richard Driehaus of Driehaus Capital
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 glance at the new hedge fund action surrounding Ichor Holdings, Ltd. (NASDAQ:ICHR).
How have hedgies been trading Ichor Holdings, Ltd. (NASDAQ:ICHR)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 13 hedge funds with a bullish position in ICHR a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Impax Asset Management was the largest shareholder of Ichor Holdings, Ltd. (NASDAQ:ICHR), with a stake worth $19.2 million reported as of the end of September. Trailing Impax Asset Management was Point72 Asset Management, which amassed a stake valued at $13.3 million. Royce & Associates, Driehaus Capital, and AQR Capital Management 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 Impax Asset Management allocated the biggest weight to Ichor Holdings, Ltd. (NASDAQ:ICHR), around 0.25% of its 13F portfolio. Driehaus Capital is also relatively very bullish on the stock, designating 0.17 percent of its 13F equity portfolio to ICHR.
Seeing as Ichor Holdings, Ltd. (NASDAQ:ICHR) has faced bearish sentiment from hedge fund managers, it’s easy to see that there is a sect of funds that decided to sell off their positions entirely heading into Q4. Intriguingly, David Rosen’s Rubric Capital Management sold off the biggest investment of the 750 funds tracked by Insider Monkey, worth close to $4.1 million in call options, and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund cut about $1.3 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks similar to Ichor Holdings, Ltd. (NASDAQ:ICHR). These stocks are ADTRAN, Inc. (NASDAQ:ADTN), Resources Connection, Inc. (NASDAQ:RECN), IGM Biosciences, Inc. (NASDAQ:IGMS), and Gamco Investors Inc. (NYSE:GBL). All of these stocks’ market caps are closest to ICHR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ADTN | 15 | 64970 | 2 |
| RECN | 17 | 54217 | 4 |
| IGMS | 11 | 151862 | 11 |
| GBL | 10 | 11055 | 0 |
| Average | 13.25 | 70526 | 4.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $54 million in ICHR’s case. Resources Connection, Inc. (NASDAQ:RECN) is the most popular stock in this table. On the other hand Gamco Investors Inc. (NYSE:GBL) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Ichor Holdings, Ltd. (NASDAQ:ICHR) is even less popular than GBL. Hedge funds clearly dropped the ball on ICHR as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 ICHR as the stock returned 30.5% during the fourth quarter (through the end of November) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
