The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Astronics Corporation (NASDAQ:ATRO) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Is Astronics Corporation (NASDAQ:ATRO) a buy here? Hedge funds were becoming more confident. The number of long hedge fund positions improved by 8 in recent months. Astronics Corporation (NASDAQ:ATRO) was in 23 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 19. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ATRO isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: 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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this lithium company which could also benefit from the electric car adoption. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Now let’s take a look at the fresh hedge fund action surrounding Astronics Corporation (NASDAQ:ATRO).
What have hedge funds been doing with Astronics Corporation (NASDAQ:ATRO)?
At the end of June, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 53% from the first quarter of 2020. On the other hand, there were a total of 18 hedge funds with a bullish position in ATRO a year ago. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
The largest stake in Astronics Corporation (NASDAQ:ATRO) was held by International Value Advisers, which reported holding $28.6 million worth of stock at the end of September. It was followed by Paradice Investment Management with a $13.8 million position. Other investors bullish on the company included Millennium Management, Royce & Associates, and D E Shaw. In terms of the portfolio weights assigned to each position International Value Advisers allocated the biggest weight to Astronics Corporation (NASDAQ:ATRO), around 2.12% of its 13F portfolio. Paradice Investment Management is also relatively very bullish on the stock, designating 1.04 percent of its 13F equity portfolio to ATRO.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, initiated the largest position in Astronics Corporation (NASDAQ:ATRO). Citadel Investment Group had $2.2 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $2.1 million position during the quarter. The following funds were also among the new ATRO investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Jonathan Berger’s Birch Grove Capital, and Donald Sussman’s Paloma Partners.
Let’s now review hedge fund activity in other stocks similar to Astronics Corporation (NASDAQ:ATRO). We will take a look at Carriage Services, Inc. (NYSE:CSV), Stereotaxis Inc (NYSE:STXS), Hoegh LNG Partners LP (NYSE:HMLP), Caleres Inc (NYSE:CAL), OneSpaWorld Holdings Limited (NASDAQ:OSW), W&T Offshore, Inc. (NYSE:WTI), and Diamond S Shipping Inc. (NYSE:DSSI). This group of stocks’ market caps resemble ATRO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CSV | 12 | 42483 | 1 |
| STXS | 14 | 138437 | 1 |
| HMLP | 5 | 13456 | -1 |
| CAL | 15 | 24014 | 0 |
| OSW | 14 | 47051 | -1 |
| WTI | 15 | 19674 | 4 |
| DSSI | 16 | 25095 | 0 |
| Average | 13 | 44316 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $77 million in ATRO’s case. Diamond S Shipping Inc. (NYSE:DSSI) is the most popular stock in this table. On the other hand Hoegh LNG Partners LP (NYSE:HMLP) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Astronics Corporation (NASDAQ:ATRO) is more popular among hedge funds. Our overall hedge fund sentiment score for ATRO is 90. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and still beat the market by 19.3 percentage points. Unfortunately ATRO wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ATRO were disappointed as the stock returned -26.9% during the third 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 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Follow Astronics Corp (NASDAQ:ATRO)
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Disclosure: None. This article was originally published at Insider Monkey.
