In this article you are going to find out whether hedge funds think XPEL Inc. (NASDAQ:XPEL) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
XPEL Inc. (NASDAQ:XPEL) shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. XPEL Inc. (NASDAQ:XPEL) was in 24 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 14. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that XPEL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Bruce Kovner of Caxton Associates LP
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Do Hedge Funds Think XPEL Is A Good Stock To Buy Now?
At the end of June, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 71% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards XPEL over the last 24 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Richard Driehaus’s 0 has the largest position in XPEL Inc. (NASDAQ:XPEL), worth close to $35.6 million, amounting to 0.5% of its total 13F portfolio. The second most bullish fund manager is 0, led by Scott Coulter, holding a $29.3 million position; 10% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish encompass Benjamin Natter’s 0, Ken Griffin’s 0 and Ken Griffin’s 0. In terms of the portfolio weights assigned to each position Cowbird Capital allocated the biggest weight to XPEL Inc. (NASDAQ:XPEL), around 9.96% of its 13F portfolio. Kent Lake Capital is also relatively very bullish on the stock, setting aside 8.67 percent of its 13F equity portfolio to XPEL.
As aggregate interest increased, key money managers were leading the bulls’ herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the most outsized position in XPEL Inc. (NASDAQ:XPEL). Marshall Wace LLP had $2.4 million invested in the company at the end of the quarter. Ryan Caldwell’s Chiron Investment Management also made a $1.5 million investment in the stock during the quarter. The other funds with brand new XPEL positions are Dmitry Balyasny’s Balyasny Asset Management, Peter Algert’s Algert Global, and Bruce Kovner’s Caxton Associates LP.
Let’s go over hedge fund activity in other stocks similar to XPEL Inc. (NASDAQ:XPEL). These stocks are Washington Federal Inc. (NASDAQ:WAFD), First Financial Bancorp (NASDAQ:FFBC), Compañía de Minas Buenaventura S.A.A. (NYSE:BVN), Outset Medical, Inc. (NASDAQ:OM), Tootsie Roll Industries, Inc. (NYSE:TR), Boise Cascade Co (NYSE:BCC), and Osisko Gold Royalties Ltd (NYSE:OR). This group of stocks’ market valuations are closest to XPEL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WAFD | 16 | 134874 | -2 |
| FFBC | 7 | 10863 | -4 |
| BVN | 8 | 40256 | 1 |
| OM | 18 | 604426 | 1 |
| TR | 12 | 29070 | -2 |
| BCC | 17 | 52000 | 1 |
| OR | 19 | 205594 | 1 |
| Average | 13.9 | 153869 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.9 hedge funds with bullish positions and the average amount invested in these stocks was $154 million. That figure was $155 million in XPEL’s case. Osisko Gold Royalties Ltd (NYSE:OR) is the most popular stock in this table. On the other hand First Financial Bancorp (NASDAQ:FFBC) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks XPEL Inc. (NASDAQ:XPEL) is more popular among hedge funds. Our overall hedge fund sentiment score for XPEL is 90. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Unfortunately XPEL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on XPEL were disappointed as the stock returned -8.5% since the end of the second quarter (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
