Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Coherent, Inc. (NASDAQ:COHR), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Coherent, Inc. (NASDAQ:COHR) worth your attention right now? The best stock pickers are taking a pessimistic view. The number of long hedge fund positions were trimmed by 2 lately. Our calculations also showed that COHR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). COHR was in 17 hedge funds’ portfolios at the end of September. There were 19 hedge funds in our database with COHR positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Philip Hempleman of Ardsley Partners
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s take a glance at the new hedge fund action regarding Coherent, Inc. (NASDAQ:COHR).
How have hedgies been trading Coherent, Inc. (NASDAQ:COHR)?
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards COHR over the last 17 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Royce & Associates was the largest shareholder of Coherent, Inc. (NASDAQ:COHR), with a stake worth $71.7 million reported as of the end of September. Trailing Royce & Associates was Fisher Asset Management, which amassed a stake valued at $55.3 million. Maplelane Capital, BeaconLight Capital, and Skylands 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 BeaconLight Capital allocated the biggest weight to Coherent, Inc. (NASDAQ:COHR), around 5.67% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, dishing out 2.53 percent of its 13F equity portfolio to COHR.
Seeing as Coherent, Inc. (NASDAQ:COHR) has witnessed a decline in interest from the smart money, it’s easy to see that there is a sect of hedge funds that decided to sell off their entire stakes heading into Q4. It’s worth mentioning that Ken Griffin’s Citadel Investment Group said goodbye to the largest position of the 750 funds monitored by Insider Monkey, valued at an estimated $9.2 million in call options, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund sold off about $7.6 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 2 funds heading into Q4.
Let’s go over hedge fund activity in other stocks similar to Coherent, Inc. (NASDAQ:COHR). These stocks are Dicks Sporting Goods Inc (NYSE:DKS), Chimera Investment Corporation (NYSE:CIM), Rayonier Inc. (NYSE:RYN), and Wintrust Financial Corporation (NASDAQ:WTFC). All of these stocks’ market caps resemble COHR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DKS | 25 | 472598 | 2 |
| CIM | 12 | 132694 | -1 |
| RYN | 13 | 317215 | -1 |
| WTFC | 19 | 285013 | -4 |
| Average | 17.25 | 301880 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $302 million. That figure was $227 million in COHR’s case. Dicks Sporting Goods Inc (NYSE:DKS) is the most popular stock in this table. On the other hand Chimera Investment Corporation (NYSE:CIM) is the least popular one with only 12 bullish hedge fund positions. Coherent, Inc. (NASDAQ:COHR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately COHR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); COHR investors were disappointed as the stock returned -1.9% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
