In this article we are going to use hedge fund sentiment as a tool and determine whether Itron, Inc. (NASDAQ:ITRI) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Is Itron, Inc. (NASDAQ:ITRI) a bargain? Money managers were betting on the stock. The number of long hedge fund bets advanced by 23 in recent months. Itron, Inc. (NASDAQ:ITRI) was in 29 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 25. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ITRI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 6 hedge funds in our database with ITRI holdings at the end of December.
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Peter Rathjens of Arrowstreet Capital
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Do Hedge Funds Think ITRI Is A Good Stock To Buy Now?
At Q1’s end, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 383% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ITRI over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ian Simm’s Impax Asset Management has the number one position in Itron, Inc. (NASDAQ:ITRI), worth close to $211.7 million, corresponding to 1.1% of its total 13F portfolio. The second most bullish fund manager is Frank Fu of CaaS Capital, with a $40.8 million position; 0.4% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Israel Englander’s Millennium Management and Renaissance Technologies. In terms of the portfolio weights assigned to each position Quaero Capital allocated the biggest weight to Itron, Inc. (NASDAQ:ITRI), around 2.08% of its 13F portfolio. Impax Asset Management is also relatively very bullish on the stock, earmarking 1.08 percent of its 13F equity portfolio to ITRI.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. CaaS Capital, managed by Frank Fu, created the biggest position in Itron, Inc. (NASDAQ:ITRI). CaaS Capital had $40.8 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $17.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Renaissance Technologies, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Steve Cohen’s Point72 Asset Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Itron, Inc. (NASDAQ:ITRI) but similarly valued. These stocks are SmileDirectClub, Inc. (NASDAQ:SDC), Terreno Realty Corporation (NYSE:TRNO), Taylor Morrison Home Corp (NYSE:TMHC), Six Flags Entertainment Corp (NYSE:SIX), Mercury Systems Inc (NASDAQ:MRCY), MACOM Technology Solutions Holdings Inc (NASDAQ:MTSI), and W.R. Grace & Co. (NYSE:GRA). All of these stocks’ market caps match ITRI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SDC | 21 | 177116 | -4 |
| TRNO | 12 | 43004 | 3 |
| TMHC | 22 | 218154 | -11 |
| SIX | 37 | 1036490 | -4 |
| MRCY | 17 | 110986 | 7 |
| MTSI | 30 | 201129 | 6 |
| GRA | 43 | 1434037 | 3 |
| Average | 26 | 460131 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $460 million. That figure was $365 million in ITRI’s case. W.R. Grace & Co. (NYSE:GRA) is the most popular stock in this table. On the other hand Terreno Realty Corporation (NYSE:TRNO) is the least popular one with only 12 bullish hedge fund positions. Itron, Inc. (NASDAQ:ITRI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ITRI is 67.4. 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 22.8% in 2021 through July 2nd and still beat the market by 6 percentage points. Hedge funds were also right about betting on ITRI, though not to the same extent, as the stock returned 10.9% since Q1 (through July 2nd) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
