Hedge Funds Are Crazy About Axcelis Technologies Inc (ACLS)

Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to the smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Axcelis Technologies Inc (NASDAQ:ACLS)? The smart money sentiment can provide an answer to this question.

Axcelis Technologies Inc (NASDAQ:ACLS) investors should pay attention to an increase in hedge fund interest of late. Axcelis Technologies Inc (NASDAQ:ACLS) was in 22 hedge funds’ portfolios at the end of September. The all time high for this statistic is 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ACLS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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. With all of this in mind let’s review the recent hedge fund action encompassing Axcelis Technologies Inc (NASDAQ:ACLS).

Richard Driehaus of Driehaus Capital

Do Hedge Funds Think ACLS Is A Good Stock To Buy Now?

At third quarter’s end, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from the previous quarter. By comparison, 20 hedge funds held shares or bullish call options in ACLS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Rima Senvest Management held the most valuable stake in Axcelis Technologies Inc (NASDAQ:ACLS), which was worth $88.9 million at the end of the third quarter. On the second spot was Driehaus Capital which amassed $44.7 million worth of shares. Royce & Associates, Arrowstreet Capital, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Glaxis Capital Management allocated the biggest weight to Axcelis Technologies Inc (NASDAQ:ACLS), around 2.95% of its 13F portfolio. Rima Senvest Management is also relatively very bullish on the stock, setting aside 2.54 percent of its 13F equity portfolio to ACLS.

With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Intrinsic Edge Capital, managed by Mark Coe, assembled the most outsized position in Axcelis Technologies Inc (NASDAQ:ACLS). Intrinsic Edge Capital had $2.9 million invested in the company at the end of the quarter. Paul Holland and Matthew Miller’s Glaxis Capital Management also initiated a $1.4 million position during the quarter. The following funds were also among the new ACLS investors: Peter Muller’s PDT Partners, Thomas Bailard’s Bailard Inc, and D. E. Shaw’s D E Shaw.

Let’s go over hedge fund activity in other stocks similar to Axcelis Technologies Inc (NASDAQ:ACLS). We will take a look at Dole plc (NYSE:DOLE), CSG Systems International, Inc. (NASDAQ:CSGS), Shenandoah Telecommunications Company (NASDAQ:SHEN), Forterra, Inc. (NASDAQ:FRTA), PROS Holdings, Inc. (NYSE:PRO), Carpenter Technology Corporation (NYSE:CRS), and Mesa Laboratories, Inc. (NASDAQ:MLAB). All of these stocks’ market caps are similar to ACLS’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.4 hedge funds with bullish positions and the average amount invested in these stocks was $135 million. That figure was $224 million in ACLS’s case. Dole plc (NYSE:DOLE) is the most popular stock in this table. On the other hand Shenandoah Telecommunications Company (NASDAQ:SHEN) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Axcelis Technologies Inc (NASDAQ:ACLS) is more popular among hedge funds. Our overall hedge fund sentiment score for ACLS is 88. 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 returned 29.6% in 2021 and managed to beat the market by 3.6 percentage points. Hedge funds were also right about betting on ACLS as the stock returned 58.5% since the end of September (through 12/31) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.