Hedge Funds Are Selling Amphenol Corporation (APH)

Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Amphenol Corporation (NYSE:APH).

Amphenol Corporation (NYSE:APH) was in 26 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 49. APH shareholders have witnessed a decrease in hedge fund interest of late. There were 39 hedge funds in our database with APH positions at the end of the second quarter. Our calculations also showed that APH isn’t among the 30 most popular stocks among hedge funds (click for Q3 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 view the key hedge fund action encompassing Amphenol Corporation (NYSE:APH).

Richard Chilton of Chilton Investment Company

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

At the end of September, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -33% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards APH over the last 25 quarters. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Robert Joseph Caruso’s Select Equity Group has the biggest position in Amphenol Corporation (NYSE:APH), worth close to $531.3 million, amounting to 1.8% of its total 13F portfolio. Sitting at the No. 2 spot is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $195.1 million position; 0.2% of its 13F portfolio is allocated to the stock. Other peers that are bullish contain Phill Gross and Robert Atchinson’s Adage Capital Management, Michael Rockefeller and KarláKroeker’s Woodline Partners and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Ayrshire Capital Management allocated the biggest weight to Amphenol Corporation (NYSE:APH), around 3.63% of its 13F portfolio. Force Hill Capital Management is also relatively very bullish on the stock, designating 2.79 percent of its 13F equity portfolio to APH.

Because Amphenol Corporation (NYSE:APH) has witnessed falling interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of funds who sold off their entire stakes in the third quarter. Intriguingly, D. E. Shaw’s D E Shaw said goodbye to the biggest investment of the 750 funds monitored by Insider Monkey, worth close to $38.5 million in stock, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors was right behind this move, as the fund dumped about $32.5 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 13 funds in the third quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Amphenol Corporation (NYSE:APH) but similarly valued. We will take a look at Lloyds Banking Group PLC (NYSE:LYG), Barclays PLC (NYSE:BCS), Match Group, Inc. (NASDAQ:MTCH), Roblox Corporation (NYSE:RBLX), Ambev SA (NYSE:ABEV), Southern Copper Corporation (NYSE:SCCO), and Canadian Pacific Railway Limited (NYSE:CP). This group of stocks’ market valuations match APH’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 28.9 hedge funds with bullish positions and the average amount invested in these stocks was $1926 million. That figure was $898 million in APH’s case. Match Group, Inc. (NASDAQ:MTCH) is the most popular stock in this table. On the other hand Lloyds Banking Group PLC (NYSE:LYG) is the least popular one with only 8 bullish hedge fund positions. Amphenol Corporation (NYSE:APH) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for APH is 26.7. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. A small number of hedge funds were also right about betting on APH as the stock returned 13.5% since the end of the third quarter (through 12/9) and outperformed the market by an even larger margin.

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