While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Sendas Distribuidora S.A. (NYSE:ASAI).
Is Sendas Distribuidora S.A. (NYSE:ASAI) a buy right now? Investors who are in the know were getting more bullish. The number of bullish hedge fund bets inched up by 6 in recent months. Sendas Distribuidora S.A. (NYSE:ASAI) was in 6 hedge funds’ portfolios at the end of March. Our calculations also showed that ASAI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the eyes of most investors, hedge funds are assumed to be slow, old financial vehicles of yesteryear. While there are more than 8000 funds with their doors open at present, We choose to focus on the elite of this group, about 850 funds. Most estimates calculate that this group of people manage the majority of the smart money’s total asset base, and by paying attention to their best investments, Insider Monkey has determined a few investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Israel Englander of Millennium Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to analyze the new hedge fund action regarding Sendas Distribuidora S.A. (NYSE:ASAI).
Do Hedge Funds Think ASAI Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6 from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in ASAI over the last 23 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Indus Capital held the most valuable stake in Sendas Distribuidora S.A. (NYSE:ASAI), which was worth $5.4 million at the end of the fourth quarter. On the second spot was Renaissance Technologies which amassed $4.8 million worth of shares. Citadel Investment Group, Citadel Investment Group, and Millennium 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 Indus Capital allocated the biggest weight to Sendas Distribuidora S.A. (NYSE:ASAI), around 0.92% of its 13F portfolio. Portland Hill Asset Management is also relatively very bullish on the stock, dishing out 0.27 percent of its 13F equity portfolio to ASAI.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Indus Capital, managed by David Kowitz and Sheldon Kasowitz, created the biggest position in Sendas Distribuidora S.A. (NYSE:ASAI). Indus Capital had $5.4 million invested in the company at the end of the quarter. Renaissance Technologies also made a $4.8 million investment in the stock during the quarter. The other funds with brand new ASAI positions are Ken Griffin’s Citadel Investment Group, Ken Griffin’s Citadel Investment Group, and Israel Englander’s Millennium Management.
Let’s check out hedge fund activity in other stocks similar to Sendas Distribuidora S.A. (NYSE:ASAI). These stocks are Celsius Holdings, Inc. (NASDAQ:CELH), I-Mab (NASDAQ:IMAB), 8×8, Inc. (NYSE:EGHT), Vishay Intertechnology, Inc. (NYSE:VSH), EPR Properties (NYSE:EPR), Sanderson Farms, Inc. (NASDAQ:SAFM), and AMN Healthcare Services Inc (NYSE:AMN). This group of stocks’ market caps are similar to ASAI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CELH | 15 | 116405 | -4 |
| IMAB | 20 | 509159 | 6 |
| EGHT | 24 | 1006511 | -2 |
| VSH | 32 | 565142 | 1 |
| EPR | 15 | 345162 | 0 |
| SAFM | 18 | 177554 | -1 |
| AMN | 19 | 82099 | 6 |
| Average | 20.4 | 400290 | 0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.4 hedge funds with bullish positions and the average amount invested in these stocks was $400 million. That figure was $12 million in ASAI’s case. Vishay Intertechnology, Inc. (NYSE:VSH) is the most popular stock in this table. On the other hand Celsius Holdings, Inc. (NASDAQ:CELH) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Sendas Distribuidora S.A. (NYSE:ASAI) is even less popular than CELH. Our overall hedge fund sentiment score for ASAI is 10. 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. Hedge funds clearly dropped the ball on ASAI as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. A small number of hedge funds were also right about betting on ASAI as the stock returned 32.2% since Q1 (through June 25th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.