Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Woodward Inc (NASDAQ:WWD) based on that data.
Is Woodward Inc (NASDAQ:WWD) a buy right now? Money managers are becoming hopeful. The number of long hedge fund bets moved up by 2 in recent months. Our calculations also showed that WWD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Boykin Curry of Eagle Capital
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to view the recent hedge fund action regarding Woodward Inc (NASDAQ:WWD).
Hedge fund activity in Woodward Inc (NASDAQ:WWD)
At Q1’s end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from the fourth quarter of 2019. On the other hand, there were a total of 20 hedge funds with a bullish position in WWD a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Woodward Inc (NASDAQ:WWD) was held by Eagle Capital Management, which reported holding $90.4 million worth of stock at the end of September. It was followed by AQR Capital Management with a $28.3 million position. Other investors bullish on the company included Citadel Investment Group, Royce & Associates, and Millennium Management. In terms of the portfolio weights assigned to each position Fort Baker Capital Management allocated the biggest weight to Woodward Inc (NASDAQ:WWD), around 3.71% of its 13F portfolio. Taconic Capital is also relatively very bullish on the stock, earmarking 0.53 percent of its 13F equity portfolio to WWD.
As aggregate interest increased, specific money managers have been driving this bullishness. Eagle Capital Management, managed by Boykin Curry, initiated the most valuable position in Woodward Inc (NASDAQ:WWD). Eagle Capital Management had $90.4 million invested in the company at the end of the quarter. Steve Pigott’s Fort Baker Capital Management also initiated a $5.6 million position during the quarter. The other funds with new positions in the stock are Frank Brosens’s Taconic Capital, Greg Eisner’s Engineers Gate Manager, and Bruce Kovner’s Caxton Associates LP.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Woodward Inc (NASDAQ:WWD) but similarly valued. These stocks are OneConnect Financial Technology Co., Ltd. (NYSE:OCFT), Eaton Vance Corp (NYSE:EV), Wright Medical Group N.V. (NASDAQ:WMGI), and Jefferies Financial Group Inc. (NYSE:JEF). This group of stocks’ market values match WWD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OCFT | 3 | 1431 | -6 |
| EV | 20 | 37006 | -4 |
| WMGI | 37 | 877799 | -9 |
| JEF | 30 | 401708 | -1 |
| Average | 22.5 | 329486 | -5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $329 million. That figure was $222 million in WWD’s case. Wright Medical Group N.V. (NASDAQ:WMGI) is the most popular stock in this table. On the other hand OneConnect Financial Technology Co., Ltd. (NYSE:OCFT) is the least popular one with only 3 bullish hedge fund positions. Woodward Inc (NASDAQ:WWD) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on WWD as the stock returned 31.8% in Q2 (through June 10th) 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.
