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. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Align Technology, Inc. (NASDAQ:ALGN) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Align Technology, Inc. (NASDAQ:ALGN) has experienced an increase in activity from the world’s largest hedge funds in recent months. ALGN was in 37 hedge funds’ portfolios at the end of the third quarter of 2018. There were 36 hedge funds in our database with ALGN positions at the end of the previous quarter. Our calculations also showed that algn isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Cliff Asness of AQR Capital Management
We’re going to take a peek at the latest hedge fund action surrounding Align Technology, Inc. (NASDAQ:ALGN).
How are hedge funds trading Align Technology, Inc. (NASDAQ:ALGN)?
Heading into the fourth quarter of 2018, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards ALGN over the last 13 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
The largest stake in Align Technology, Inc. (NASDAQ:ALGN) was held by Renaissance Technologies, which reported holding $1.09 billion worth of stock at the end of September. It was followed by AQR Capital Management with a $223.8 million position. Other investors bullish on the company included Arrowstreet Capital, Citadel Investment Group, and Citadel Investment Group.
Consequently, key money managers have jumped into Align Technology, Inc. (NASDAQ:ALGN) headfirst. Carlson Capital, managed by Clint Carlson, initiated the largest position in Align Technology, Inc. (NASDAQ:ALGN). Carlson Capital had $26 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also initiated a $21.4 million position during the quarter. The other funds with new positions in the stock are Benjamin A. Smith’s Laurion Capital Management, Matthew Tewksbury’s Stevens Capital Management, and Steve Cohen’s Point72 Asset Management.
Let’s check out hedge fund activity in other stocks similar to Align Technology, Inc. (NASDAQ:ALGN). These stocks are ArcelorMittal (NYSE:MT), Nokia Corporation (NYSE:NOK), Sempra Energy (NYSE:SRE), and Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN). All of these stocks’ market caps match ALGN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MT | 14 | 179765 | -2 |
| NOK | 19 | 520867 | 5 |
| SRE | 33 | 2912686 | 11 |
| ALXN | 37 | 2808171 | -6 |
| Average | 25.75 | 1605372 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.75 hedge funds with bullish positions and the average amount invested in these stocks was $1.61 billion. That figure was $2166 million in ALGN’s case. Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) is the most popular stock in this table. On the other hand ArcelorMittal (NYSE:MT) is the least popular one with only 14 bullish hedge fund positions. Align Technology, Inc. (NASDAQ:ALGN) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ALXN might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
