Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Avery Dennison Corporation (NYSE:AVY) based on that data.
Is Avery Dennison Corporation (NYSE:AVY) ready to rally soon? The smart money was selling. The number of long hedge fund bets shrunk by 3 in recent months. Avery Dennison Corporation (NYSE:AVY) was in 20 hedge funds’ portfolios at the end of March. The all time high for this statistic is 30. Our calculations also showed that AVY isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 23 hedge funds in our database with AVY positions at the end of the fourth quarter.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
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 let’s take a look at the latest hedge fund action surrounding Avery Dennison Corporation (NYSE:AVY).
Do Hedge Funds Think AVY Is A Good Stock To Buy Now?
At first quarter’s end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards AVY over the last 23 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, Select Equity Group was the largest shareholder of Avery Dennison Corporation (NYSE:AVY), with a stake worth $120.2 million reported as of the end of March. Trailing Select Equity Group was AQR Capital Management, which amassed a stake valued at $44.2 million. Citadel Investment Group, Scopus Asset Management, and Appian Way Asset 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 Appian Way Asset Management allocated the biggest weight to Avery Dennison Corporation (NYSE:AVY), around 9.62% of its 13F portfolio. Running Oak Capital is also relatively very bullish on the stock, dishing out 1.98 percent of its 13F equity portfolio to AVY.
Judging by the fact that Avery Dennison Corporation (NYSE:AVY) has witnessed a decline in interest from hedge fund managers, it’s easy to see that there exists a select few hedgies that elected to cut their entire stakes last quarter. It’s worth mentioning that John Armitage’s Egerton Capital Limited dumped the largest investment of all the hedgies monitored by Insider Monkey, worth close to $57.6 million in stock. Steve Cohen’s fund, Point72 Asset Management, also said goodbye to its stock, about $20.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 3 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Avery Dennison Corporation (NYSE:AVY). These stocks are Campbell Soup Company (NYSE:CPB), PagSeguro Digital Ltd. (NYSE:PAGS), Cenovus Energy Inc (NYSE:CVE), VICI Properties Inc. (NYSE:VICI), GDS Holdings Limited (NASDAQ:GDS), Entegris Inc (NASDAQ:ENTG), and Eastman Chemical Company (NYSE:EMN). This group of stocks’ market values are similar to AVY’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CPB | 28 | 345398 | -1 |
| PAGS | 33 | 1804603 | 8 |
| CVE | 23 | 379693 | 0 |
| VICI | 41 | 875487 | 3 |
| GDS | 40 | 2080333 | 1 |
| ENTG | 23 | 1484733 | -7 |
| EMN | 27 | 162100 | -4 |
| Average | 30.7 | 1018907 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.7 hedge funds with bullish positions and the average amount invested in these stocks was $1019 million. That figure was $300 million in AVY’s case. VICI Properties Inc. (NYSE:VICI) is the most popular stock in this table. On the other hand Cenovus Energy Inc (NYSE:CVE) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks Avery Dennison Corporation (NYSE:AVY) is even less popular than CVE. Our overall hedge fund sentiment score for AVY is 22. 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 23.8% in 2021 through July 16th but managed to beat the market by 7.7 percentage points. A small number of hedge funds were also right about betting on AVY, though not to the same extent, as the stock returned 11% since the end of March (through July 16th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
