The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 867 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2021. In this article we are going to take a look at smart money sentiment towards Axalta Coating Systems Ltd (NYSE:AXTA).
Is Axalta Coating Systems Ltd (NYSE:AXTA) a buy right now? Prominent investors were getting less optimistic. The number of bullish hedge fund bets decreased by 10 lately. Axalta Coating Systems Ltd (NYSE:AXTA) was in 37 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 60. Our calculations also showed that AXTA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 47 hedge funds in our database with AXTA holdings at the end of June.
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. Keeping this in mind we’re going to take a peek at the latest hedge fund action regarding Axalta Coating Systems Ltd (NYSE:AXTA).
Lee Ainslie of Maverick Capital
Do Hedge Funds Think AXTA Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 37 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -21% from the previous quarter. On the other hand, there were a total of 45 hedge funds with a bullish position in AXTA a year ago. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
The largest stake in Axalta Coating Systems Ltd (NYSE:AXTA) was held by Rivulet Capital, which reported holding $189.9 million worth of stock at the end of September. It was followed by Ariel Investments with a $167.9 million position. Other investors bullish on the company included Gates Capital Management, Citadel Investment Group, and Lakewood Capital Management. In terms of the portfolio weights assigned to each position Rivulet Capital allocated the biggest weight to Axalta Coating Systems Ltd (NYSE:AXTA), around 9.91% of its 13F portfolio. MD Sass is also relatively very bullish on the stock, designating 5.95 percent of its 13F equity portfolio to AXTA.
Because Axalta Coating Systems Ltd (NYSE:AXTA) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of hedge funds that decided to sell off their positions entirely by the end of the third quarter. Intriguingly, Parag Vora’s HG Vora Capital Management dropped the largest position of the 750 funds monitored by Insider Monkey, worth about $53.4 million in stock. James Crichton’s fund, Hitchwood Capital Management, also said goodbye to its stock, about $20.6 million worth. These moves are important to note, as total hedge fund interest was cut by 10 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks similar to Axalta Coating Systems Ltd (NYSE:AXTA). These stocks are Celsius Holdings, Inc. (NASDAQ:CELH), Kornit Digital Ltd. (NASDAQ:KRNT), Sportradar Group AG (NASDAQ:SRAD), Fiverr International Ltd. (NYSE:FVRR), AngloGold Ashanti Limited (NYSE:AU), Exelixis, Inc. (NASDAQ:EXEL), and Beyond Meat, Inc. (NASDAQ:BYND). All of these stocks’ market caps resemble AXTA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CELH | 22 | 220511 | 2 |
| KRNT | 22 | 287826 | 1 |
| SRAD | 30 | 158145 | 30 |
| FVRR | 29 | 520429 | -1 |
| AU | 10 | 327927 | -2 |
| EXEL | 30 | 896585 | -3 |
| BYND | 16 | 114044 | -1 |
| Average | 22.7 | 360781 | 3.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.7 hedge funds with bullish positions and the average amount invested in these stocks was $361 million. That figure was $1049 million in AXTA’s case. Sportradar Group AG (NASDAQ:SRAD) is the most popular stock in this table. On the other hand AngloGold Ashanti Limited (NYSE:AU) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Axalta Coating Systems Ltd (NYSE:AXTA) is more popular among hedge funds. Our overall hedge fund sentiment score for AXTA is 63.5. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately AXTA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on AXTA were disappointed as the stock returned 3.9% since the end of the third quarter (through 11/30) 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.
Follow Axalta Coating Systems Ltd. (NYSE:AXTA)
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Disclosure: None. This article was originally published at Insider Monkey.
