The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Adient plc (NYSE:ADNT) based on those filings.
Adient plc (NYSE:ADNT) has experienced an increase in activity from the world’s largest hedge funds lately. Adient plc (NYSE:ADNT) was in 39 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 48. Our calculations also showed that ADNT isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to analyze the fresh hedge fund action surrounding Adient plc (NYSE:ADNT).
Do Hedge Funds Think ADNT Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards ADNT over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Lyrical Asset Management was the largest shareholder of Adient plc (NYSE:ADNT), with a stake worth $240.5 million reported as of the end of March. Trailing Lyrical Asset Management was Renaissance Technologies, which amassed a stake valued at $64.7 million. Redwood Capital Management, 683 Capital Partners, and Arrowstreet Capital 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 Clearfield Capital allocated the biggest weight to Adient plc (NYSE:ADNT), around 10.59% of its 13F portfolio. Elm Ridge Capital is also relatively very bullish on the stock, dishing out 5.79 percent of its 13F equity portfolio to ADNT.
As aggregate interest increased, key money managers have been driving this bullishness. Clearfield Capital, managed by Philip Hilal, initiated the most outsized position in Adient plc (NYSE:ADNT). Clearfield Capital had $27.8 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $14.8 million position during the quarter. The following funds were also among the new ADNT investors: Michael Cowley’s Sandbar Asset Management, Dmitry Balyasny’s Balyasny Asset Management, and John W. Moon’s Moon Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Adient plc (NYSE:ADNT). We will take a look at M.D.C. Holdings, Inc. (NYSE:MDC), Tegna Inc (NYSE:TGNA), NewMarket Corporation (NYSE:NEU), APi Group Corporation (NYSE:APG), Jamf Holding Corp. (NASDAQ:JAMF), Artisan Partners Asset Management Inc (NYSE:APAM), and Community Bank System, Inc. (NYSE:CBU). All of these stocks’ market caps match ADNT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MDC | 13 | 36787 | -6 |
| TGNA | 20 | 334186 | -14 |
| NEU | 14 | 103793 | -1 |
| APG | 33 | 1370019 | 2 |
| JAMF | 17 | 2745414 | -9 |
| APAM | 21 | 279518 | 0 |
| CBU | 8 | 29233 | -5 |
| Average | 18 | 699850 | -4.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $700 million. That figure was $754 million in ADNT’s case. APi Group Corporation (NYSE:APG) is the most popular stock in this table. On the other hand Community Bank System, Inc. (NYSE:CBU) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Adient plc (NYSE:ADNT) is more popular among hedge funds. Our overall hedge fund sentiment score for ADNT is 81.4. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Unfortunately ADNT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ADNT were disappointed as the stock returned 1.6% since the end of the first quarter (through 6/25) 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.
