Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Exponent, Inc. (NASDAQ:EXPO), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Exponent, Inc. (NASDAQ:EXPO) a good investment today? Investors who are in the know were buying. The number of bullish hedge fund positions increased by 3 lately. Exponent, Inc. (NASDAQ:EXPO) was in 20 hedge funds’ portfolios at the end of June. The all time high for this statistic is 25. Our calculations also showed that EXPO isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Andrew Sandler of Sandler Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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. Now we’re going to take a gander at the fresh hedge fund action regarding Exponent, Inc. (NASDAQ:EXPO).
Do Hedge Funds Think EXPO Is A Good Stock To Buy Now?
At second quarter’s end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from one quarter earlier. By comparison, 19 hedge funds held shares or bullish call options in EXPO a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
The largest stake in Exponent, Inc. (NASDAQ:EXPO) was held by Millennium Management, which reported holding $19.2 million worth of stock at the end of June. It was followed by Sandler Capital Management with a $15.2 million position. Other investors bullish on the company included Renaissance Technologies, GLG Partners, and Royce & Associates. In terms of the portfolio weights assigned to each position Sandler Capital Management allocated the biggest weight to Exponent, Inc. (NASDAQ:EXPO), around 1.19% of its 13F portfolio. Montanaro Asset Management is also relatively very bullish on the stock, dishing out 0.85 percent of its 13F equity portfolio to EXPO.
Now, key money managers were breaking ground themselves. Renaissance Technologies, assembled the biggest position in Exponent, Inc. (NASDAQ:EXPO). Renaissance Technologies had $11.7 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $0.7 million position during the quarter. The other funds with brand new EXPO positions are Bruce Kovner’s Caxton Associates LP, Greg Eisner’s Engineers Gate Manager, and Frederick DiSanto’s Ancora Advisors.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Exponent, Inc. (NASDAQ:EXPO) but similarly valued. We will take a look at Cloudera, Inc. (NYSE:CLDR), Inari Medical, Inc. (NASDAQ:NARI), Bloom Energy Corporation (NYSE:BE), Hawaiian Electric Industries, Inc. (NYSE:HE), MGIC Investment Corporation (NYSE:MTG), Trupanion Inc (NASDAQ:TRUP), and Vicor Corp (NASDAQ:VICR). This group of stocks’ market valuations resemble EXPO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CLDR | 34 | 1377101 | 4 |
| NARI | 30 | 405211 | 8 |
| BE | 20 | 76845 | -2 |
| HE | 14 | 76206 | 2 |
| MTG | 27 | 265101 | -1 |
| TRUP | 14 | 294926 | -3 |
| VICR | 13 | 123682 | -7 |
| Average | 21.7 | 374153 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.7 hedge funds with bullish positions and the average amount invested in these stocks was $374 million. That figure was $92 million in EXPO’s case. Cloudera, Inc. (NYSE:CLDR) is the most popular stock in this table. On the other hand Vicor Corp (NASDAQ:VICR) is the least popular one with only 13 bullish hedge fund positions. Exponent, Inc. (NASDAQ:EXPO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EXPO is 48.7. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on EXPO as the stock returned 27.5% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
