Is AptarGroup, Inc. (NYSE:ATR) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
AptarGroup, Inc. (NYSE:ATR) was in 22 hedge funds’ portfolios at the end of the third quarter of 2019. ATR shareholders have witnessed an increase in support from the world’s most elite money managers lately. There were 20 hedge funds in our database with ATR holdings at the end of the previous quarter. Our calculations also showed that ATR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Chuck Royce of Royce & Associates
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s review the fresh hedge fund action regarding AptarGroup, Inc. (NYSE:ATR).
How are hedge funds trading AptarGroup, Inc. (NYSE:ATR)?
Heading into the fourth quarter of 2019, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ATR over the last 17 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in AptarGroup, Inc. (NYSE:ATR) was held by Adage Capital Management, which reported holding $44.4 million worth of stock at the end of September. It was followed by Royce & Associates with a $22.7 million position. Other investors bullish on the company included Renaissance Technologies, Millennium Management, and Fisher Asset Management. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to AptarGroup, Inc. (NYSE:ATR), around 0.21% of its 13F portfolio. Diker Management is also relatively very bullish on the stock, designating 0.15 percent of its 13F equity portfolio to ATR.
Now, some big names were leading the bulls’ herd. Marshall Wace, managed by Paul Marshall and Ian Wace, initiated the biggest position in AptarGroup, Inc. (NYSE:ATR). Marshall Wace had $2.3 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also made a $2.2 million investment in the stock during the quarter. The following funds were also among the new ATR investors: David E. Shaw’s D E Shaw, Alec Litowitz and Ross Laser’s Magnetar Capital, and Ray Dalio’s Bridgewater Associates.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as AptarGroup, Inc. (NYSE:ATR) but similarly valued. These stocks are AngloGold Ashanti Limited (NYSE:AU), BorgWarner Inc. (NYSE:BWA), Nielsen Holdings plc (NYSE:NLSN), and Douglas Emmett, Inc. (NYSE:DEI). All of these stocks’ market caps match ATR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AU | 19 | 454469 | 3 |
| BWA | 22 | 718476 | 1 |
| NLSN | 30 | 1129196 | -5 |
| DEI | 20 | 570666 | 1 |
| Average | 22.75 | 718202 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.75 hedge funds with bullish positions and the average amount invested in these stocks was $718 million. That figure was $112 million in ATR’s case. Nielsen Holdings plc (NYSE:NLSN) is the most popular stock in this table. On the other hand AngloGold Ashanti Limited (NYSE:AU) is the least popular one with only 19 bullish hedge fund positions. AptarGroup, Inc. (NYSE:ATR) 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 ATR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ATR investors were disappointed as the stock returned -5.1% 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.
