A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Arotech Corporation (NASDAQ:ARTX).
Arotech Corporation (NASDAQ:ARTX) was in 8 hedge funds’ portfolios at the end of September. ARTX has seen an increase in activity from the world’s largest hedge funds of late. There were 6 hedge funds in our database with ARTX positions at the end of the previous quarter. Our calculations also showed that ARTX 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.
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.
J. Carlo Cannell of Cannell Capital
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 review the key hedge fund action regarding Arotech Corporation (NASDAQ:ARTX).
How have hedgies been trading Arotech Corporation (NASDAQ:ARTX)?
At Q3’s end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ARTX over the last 17 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Solas Capital Management held the most valuable stake in Arotech Corporation (NASDAQ:ARTX), which was worth $4.2 million at the end of the third quarter. On the second spot was Cannell Capital which amassed $4.2 million worth of shares. Beryl Capital Management, Ancora Advisors, and Winton Capital 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 Solas Capital Management allocated the biggest weight to Arotech Corporation (NASDAQ:ARTX), around 4.37% of its 13F portfolio. Cannell Capital is also relatively very bullish on the stock, setting aside 1.36 percent of its 13F equity portfolio to ARTX.
As aggregate interest increased, specific money managers have been driving this bullishness. Beryl Capital Management, managed by David Alexander Witkin, assembled the biggest position in Arotech Corporation (NASDAQ:ARTX). Beryl Capital Management had $1.1 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Ken Griffin’s Citadel Investment Group.
Let’s now take a look at hedge fund activity in other stocks similar to Arotech Corporation (NASDAQ:ARTX). These stocks are Community First Bancshares, Inc. (NASDAQ:CFBI), Lantronix Inc (NASDAQ:LTRX), Perma-Pipe International Holdings, Inc. (NASDAQ:PPIH), and Erytech Pharma S.A. (NASDAQ:ERYP). This group of stocks’ market valuations match ARTX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CFBI | 1 | 680 | 0 |
| LTRX | 2 | 2620 | 0 |
| PPIH | 2 | 8028 | 0 |
| ERYP | 2 | 2853 | 0 |
| Average | 1.75 | 3545 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 1.75 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $11 million in ARTX’s case. Lantronix Inc (NASDAQ:LTRX) is the most popular stock in this table. On the other hand Community First Bancshares, Inc. (NASDAQ:CFBI) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Arotech Corporation (NASDAQ:ARTX) is more popular among hedge funds. 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 ARTX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on ARTX were disappointed as the stock returned 2% 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.
