Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Aspen Aerogels Inc (NYSE:ASPN).
Is Aspen Aerogels Inc a safe stock to buy now? Investors who are in the know are buying. The number of long hedge fund bets inched up by 2 lately. At the end of this article we will also compare ASPN to other stocks including Maxwell Technologies Inc. (NASDAQ:MXWL), HORSEHEAD HOLDING CORP. (NASDAQ:ZINC), and Hurco Companies, Inc. (NASDAQ:HURC) to get a better sense of its popularity.
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Now, we’re going to review the latest action regarding Aspen Aerogels Inc (NYSE:ASPN).
How are hedge funds trading Aspen Aerogels Inc (NYSE:ASPN)?
At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from the second quarter. With hedgies’ sentiment swirling, there exist a few noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Brian Taylor’s Pine River Capital Management has the number one position in Aspen Aerogels Inc (NYSE:ASPN), worth close to $8 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Coe Capital Management, led by Mark Coe, holding a $0.9 million position; the fund has 0.3% of its 13F portfolio invested in the stock.
Consequently, some big names were leading the bulls’ herd. Renaissance Technologies, managed by Jim Simons, established a position in Aspen Aerogels Inc (NYSE:ASPN). Renaissance Technologies had $0.7 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.2 million investment in the stock during the quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Aspen Aerogels Inc (NYSE:ASPN) but similarly valued. These stocks are Maxwell Technologies Inc. (NASDAQ:MXWL), HORSEHEAD HOLDING CORP. (NASDAQ:ZINC), Hurco Companies, Inc. (NASDAQ:HURC), and Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG). This group of stocks’ market values are similar to ASPN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MXWL | 8 | 18169 | -4 |
| ZINC | 11 | 43067 | -4 |
| HURC | 7 | 31064 | 1 |
| BBRG | 16 | 17571 | 0 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $10 million in ASPN’s case. Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG)) is the most popular stock in this table. On the other hand Hurco Companies, Inc. (NASDAQ:HURC) is the least popular one. With only 4 bullish hedge fund positions, Aspen Aerogels Inc (NYSE:ASPN) is even less popular than HURC. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.