Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Evoqua Water Technologies Corp. (NYSE:AQUA) in this article.
Is Evoqua Water Technologies Corp. (NYSE:AQUA) a first-rate stock to buy now? Money managers were getting more optimistic. The number of long hedge fund bets advanced by 3 lately. Evoqua Water Technologies Corp. (NYSE:AQUA) was in 25 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 28. Our calculations also showed that AQUA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 22 hedge funds in our database with AQUA positions at the end of the second quarter.
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 let’s review the recent hedge fund action surrounding Evoqua Water Technologies Corp. (NYSE:AQUA).
Richard Driehaus of Driehaus Capital
Do Hedge Funds Think AQUA Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in AQUA 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.
The largest stake in Evoqua Water Technologies Corp. (NYSE:AQUA) was held by Impax Asset Management, which reported holding $180.9 million worth of stock at the end of September. It was followed by P2 Capital Partners with a $82.7 million position. Other investors bullish on the company included Alyeska Investment Group, Adage Capital Management, and Driehaus Capital. In terms of the portfolio weights assigned to each position P2 Capital Partners allocated the biggest weight to Evoqua Water Technologies Corp. (NYSE:AQUA), around 6.97% of its 13F portfolio. Impax Asset Management is also relatively very bullish on the stock, setting aside 0.74 percent of its 13F equity portfolio to AQUA.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Moore Global Investments, managed by Louis Bacon, assembled the largest position in Evoqua Water Technologies Corp. (NYSE:AQUA). Moore Global Investments had $8.4 million invested in the company at the end of the quarter. Zilvinas Mecelis’s Covalis Capital also initiated a $2.2 million position during the quarter. The other funds with new positions in the stock are Greg Eisner’s Engineers Gate Manager, Paul Tudor Jones’s Tudor Investment Corp, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s now take a look at hedge fund activity in other stocks similar to Evoqua Water Technologies Corp. (NYSE:AQUA). These stocks are Hamilton Lane Incorporated (NASDAQ:HLNE), ChampionX Corporation (NASDAQ:CHX), Virtu Financial Inc (NASDAQ:VIRT), Revolve Group, Inc. (NYSE:RVLV), Air Lease Corp (NYSE:AL), Madison Square Garden Sports Corp. (NYSE:MSGS), and DT Midstream Inc. (NYSE:DTM). All of these stocks’ market caps resemble AQUA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HLNE | 19 | 80632 | 4 |
| CHX | 29 | 444618 | -1 |
| VIRT | 15 | 215687 | -7 |
| RVLV | 25 | 229850 | 3 |
| AL | 24 | 551268 | 2 |
| MSGS | 35 | 1144110 | -2 |
| DTM | 22 | 482419 | 18 |
| Average | 24.1 | 449798 | 2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.1 hedge funds with bullish positions and the average amount invested in these stocks was $450 million. That figure was $438 million in AQUA’s case. Madison Square Garden Sports Corp. (NYSE:MSGS) is the most popular stock in this table. On the other hand Virtu Financial Inc (NASDAQ:VIRT) is the least popular one with only 15 bullish hedge fund positions. Evoqua Water Technologies Corp. (NYSE:AQUA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AQUA is 59.8. 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 AQUA as the stock returned 23.9% since the end of Q3 (through 12/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Evoqua Water Technologies Corp. (NYSE:AQUA)
Follow Evoqua Water Technologies Corp. (NYSE:AQUA)
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Disclosure: None. This article was originally published at Insider Monkey.
