In this article we will take a look at whether hedge funds think Axcelis Technologies Inc (NASDAQ:ACLS) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Axcelis Technologies Inc (NASDAQ:ACLS) has seen an increase in hedge fund sentiment lately. Axcelis Technologies Inc (NASDAQ:ACLS) was in 21 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 22. Our calculations also showed that ACLS 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.
David Harding of Winton Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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 take a glance at the key hedge fund action encompassing Axcelis Technologies Inc (NASDAQ:ACLS).
Do Hedge Funds Think ACLS Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in ACLS a year ago. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
More specifically, Royce & Associates was the largest shareholder of Axcelis Technologies Inc (NASDAQ:ACLS), with a stake worth $41.4 million reported as of the end of March. Trailing Royce & Associates was Rima Senvest Management, which amassed a stake valued at $40.3 million. Driehaus Capital, 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 2.29% of its 13F portfolio. Rima Senvest Management is also relatively very bullish on the stock, dishing out 1.27 percent of its 13F equity portfolio to ACLS.
As one would reasonably expect, specific money managers were breaking ground themselves. Driehaus Capital, managed by Richard Driehaus, assembled the most valuable position in Axcelis Technologies Inc (NASDAQ:ACLS). Driehaus Capital had $31 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $9.4 million position during the quarter. The following funds were also among the new ACLS investors: Paul Holland and Matthew Miller’s Glaxis Capital Management, Mika Toikka’s AlphaCrest Capital Management, and Mario Gabelli’s GAMCO Investors.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Axcelis Technologies Inc (NASDAQ:ACLS) but similarly valued. These stocks are Broadmark Realty Capital Inc. (NYSE:BRMK), Supernus Pharmaceuticals Inc (NASDAQ:SUPN), Encore Wire Corporation (NASDAQ:WIRE), Whiting Petroleum Corporation (NYSE:WLL), First Commonwealth Financial (NYSE:FCF), Middlesex Water Company (NASDAQ:MSEX), and Nurix Therapeutics, Inc. (NASDAQ:NRIX). This group of stocks’ market valuations are closest to ACLS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BRMK | 12 | 98728 | 2 |
| SUPN | 15 | 183518 | -4 |
| WIRE | 19 | 81041 | 3 |
| WLL | 21 | 223784 | 5 |
| FCF | 13 | 21078 | 1 |
| MSEX | 8 | 58560 | 3 |
| NRIX | 17 | 302452 | 6 |
| Average | 15 | 138452 | 2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $138 million. That figure was $168 million in ACLS’s case. Whiting Petroleum Corporation (NYSE:WLL) is the most popular stock in this table. On the other hand Middlesex Water Company (NASDAQ:MSEX) is the least popular one with only 8 bullish hedge fund positions. Axcelis Technologies Inc (NASDAQ:ACLS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ACLS is 86.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately ACLS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ACLS were disappointed as the stock returned -16% since the end of March (through 7/16) 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 many of these stocks already outperformed the market since 2019.
Follow Axcelis Technologies Inc (NASDAQ:ACLS)
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Disclosure: None. This article was originally published at Insider Monkey.
