Hedge Funds Are Crazy About AMETEK, Inc. (AME)

The SEC requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings discloses the funds’ positions on September 30. We at Insider Monkey have compiled an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded AMETEK, Inc. (NYSE:AME) based on those filings.

Is AMETEK, Inc. (NYSE:AME) the right pick for your portfolio? Money managers are taking a bullish view. The number of bullish hedge fund positions advanced by 4 in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Regions Financial Corporation (NYSE:RF), Dover Corp (NYSE:DOV), and AEGON N.V. (ADR) (NYSE:AEG) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Now, we’re going to take a look at the key action regarding AMETEK, Inc. (NYSE:AME).

How have hedgies been trading AMETEK, Inc. (NYSE:AME)?

At Q3’s end, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 16% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, SQ Advisors, managed by Lou Simpson, holds the most valuable position in AMETEK, Inc. (NYSE:AME). The fund has a $344.8 million position in the stock, comprising 13.7% of its 13F portfolio. On SQ Advisors’s heels is Citadel Investment Group, managed by Ken Griffin, which holds a $198.8 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions encompass Mario Gabelli’s GAMCO Investors, Steve Cohen’s Point72 Asset Management and Dan Loeb’s Third Point.

As industrywide interest jumped, some big names were breaking ground themselves. Point72 Asset Management, managed by Steve Cohen, initiated the most valuable position in AMETEK, Inc. (NYSE:AME). The fund reportedly had $66 million invested in the company at the end of the quarter. Brian Ashford-Russell and Tim Woolley’s Polar Capital also initiated a $28.8 million position during the quarter. The other funds with brand new AME positions are Anand Parekh’s Alyeska Investment Group, Gregg Moskowitz’s Interval Partners, and Alec Litowitz and Ross Laser’s Magnetar Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as AMETEK, Inc. (NYSE:AME) but similarly valued. We will take a look at Regions Financial Corporation (NYSE:RF), Dover Corp (NYSE:DOV), AEGON N.V. (ADR) (NYSE:AEG), and SL Green Realty Corp (NYSE:SLG). All of these stocks’ market caps match AME’s market cap.

As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $466 million. That figure was $1.05 billion in AME’s case. Regions Financial Corporation (NYSE:RF) is the most popular stock in this table. On the other hand AEGON N.V. (ADR) (NYSE:AEG) is the least popular one with only 8 bullish hedge fund positions. AMETEK, Inc. (NYSE:AME) 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 RF might be a better candidate to consider a long position.

Disclosure: none.