While the market driven by short-term sentiment influenced by uncertainty regarding the future of the interest rate environment in the US, declining oil prices and the trade war with China, many smart money investors kept their optimism regarding the current bull run in the fourth quarter, while still hedging many of their long positions. However, as we know, big investors usually buy stocks with strong fundamentals, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Maxar Technologies Ltd. (NYSE:MAXR).
Is Maxar Technologies Ltd. (NYSE:MAXR) an outstanding investment now? The smart money is becoming hopeful. The number of bullish hedge fund bets moved up by 1 lately. Our calculations also showed that MAXR isn’t among the 30 most popular stocks among hedge funds. MAXR was in 8 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 7 hedge funds in our database with MAXR positions at the end of the previous quarter.
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 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to check out the fresh hedge fund action regarding Maxar Technologies Ltd. (NYSE:MAXR).
How are hedge funds trading Maxar Technologies Ltd. (NYSE:MAXR)?
At Q4’s end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from one quarter earlier. On the other hand, there were a total of 5 hedge funds with a bullish position in MAXR a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Maxar Technologies Ltd. (NYSE:MAXR) was held by Renaissance Technologies, which reported holding $1.7 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $1.6 million position. Other investors bullish on the company included AQR Capital Management, BlueCrest Capital Mgmt., and D E Shaw.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, initiated the most valuable position in Maxar Technologies Ltd. (NYSE:MAXR). Renaissance Technologies had $1.7 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also made a $0.7 million investment in the stock during the quarter. The other funds with brand new MAXR positions are Michael Platt and William Reeves’s BlueCrest Capital Mgmt., Dmitry Balyasny’s Balyasny Asset Management, and George Zweig, Shane Haas and Ravi Chander’s Signition LP.
Let’s go over hedge fund activity in other stocks similar to Maxar Technologies Ltd. (NYSE:MAXR). We will take a look at Chico’s FAS, Inc. (NYSE:CHS), Allegiance Bancshares, Inc. (NASDAQ:ABTX), Opus Bank (NASDAQ:OPB), and Columbus McKinnon Corporation (NASDAQ:CMCO). All of these stocks’ market caps are similar to MAXR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CHS | 14 | 66024 | -4 |
| ABTX | 6 | 11993 | -1 |
| OPB | 10 | 140062 | 1 |
| CMCO | 25 | 65825 | 5 |
| Average | 13.75 | 70976 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $6 million in MAXR’s case. Columbus McKinnon Corporation (NASDAQ:CMCO) is the most popular stock in this table. On the other hand Allegiance Bancshares, Inc. (NASDAQ:ABTX) is the least popular one with only 6 bullish hedge fund positions. Maxar Technologies Ltd. (NYSE:MAXR) 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately MAXR wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); MAXR investors were disappointed as the stock returned -61% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.