The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 867 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2021. In this article we are going to take a look at smart money sentiment towards II-VI, Inc. (NASDAQ:IIVI).
Is II-VI, Inc. (NASDAQ:IIVI) undervalued? Hedge funds were in a pessimistic mood. The number of bullish hedge fund bets retreated by 5 lately. II-VI, Inc. (NASDAQ:IIVI) was in 24 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 39. Our calculations also showed that IIVI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 29 hedge funds in our database with IIVI holdings at the end of June.
Richard Chilton of Chilton Investment Company
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. Keeping this in mind we’re going to take a look at the new hedge fund action encompassing II-VI, Inc. (NASDAQ:IIVI).
Do Hedge Funds Think IIVI Is A Good Stock To Buy Now?
At Q3’s end, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards IIVI over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Atreides Management was the largest shareholder of II-VI, Inc. (NASDAQ:IIVI), with a stake worth $91.4 million reported as of the end of September. Trailing Atreides Management was Select Equity Group, which amassed a stake valued at $38.1 million. Renaissance Technologies, Citadel Investment Group, and Chilton Investment Company 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 Boardman Bay Capital Management allocated the biggest weight to II-VI, Inc. (NASDAQ:IIVI), around 6.92% of its 13F portfolio. SAYA Management is also relatively very bullish on the stock, dishing out 2.82 percent of its 13F equity portfolio to IIVI.
Due to the fact that II-VI, Inc. (NASDAQ:IIVI) has experienced bearish sentiment from hedge fund managers, it’s safe to say that there lies a certain “tier” of funds that elected to cut their positions entirely in the third quarter. Intriguingly, Chuck Royce’s Royce & Associates said goodbye to the biggest investment of the 750 funds followed by Insider Monkey, comprising close to $5.8 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dumped about $5.6 million worth. These transactions are interesting, as total hedge fund interest fell by 5 funds in the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as II-VI, Inc. (NASDAQ:IIVI) but similarly valued. These stocks are Cyberark Software Ltd (NASDAQ:CYBR), Silicon Laboratories (NASDAQ:SLAB), Saia Inc (NASDAQ:SAIA), Popular Inc (NASDAQ:BPOP), Royal Gold, Inc (NASDAQ:RGLD), The Boston Beer Company Inc (NYSE:SAM), and Teradata Corporation (NYSE:TDC). This group of stocks’ market caps resemble IIVI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CYBR | 20 | 414967 | -7 |
| SLAB | 18 | 207783 | 3 |
| SAIA | 27 | 539493 | 5 |
| BPOP | 33 | 772508 | 0 |
| RGLD | 21 | 168093 | 1 |
| SAM | 19 | 237876 | -23 |
| TDC | 28 | 583784 | 2 |
| Average | 23.7 | 417786 | -2.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.7 hedge funds with bullish positions and the average amount invested in these stocks was $418 million. That figure was $250 million in IIVI’s case. Popular Inc (NASDAQ:BPOP) is the most popular stock in this table. On the other hand Silicon Laboratories (NASDAQ:SLAB) is the least popular one with only 18 bullish hedge fund positions. II-VI, Inc. (NASDAQ:IIVI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IIVI is 38.5. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Hedge funds were also right about betting on IIVI as the stock returned 12.6% since the end of Q3 (through 12/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
