“Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn’t by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today’s darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn’t attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal,” said Vilas Fund in its Q1 investor letter. We aren’t sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Moog Inc (NYSE:MOG).
Moog Inc (NYSE:MOG) has experienced an increase in activity from the world’s largest hedge funds recently. Our calculations also showed that MOG 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.
Mario Gabelli of GAMCO Investors
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. We’re going to view the key hedge fund action regarding Moog Inc (NYSE:MOG).
Hedge fund activity in Moog Inc (NYSE:MOG)
At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in MOG a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, D E Shaw held the most valuable stake in Moog Inc (NYSE:MOG), which was worth $33.9 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $17.1 million worth of shares. AQR Capital Management, GAMCO Investors, and Marshall Wace 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 Prospector Partners allocated the biggest weight to Moog Inc (NYSE:MOG), around 0.26% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, earmarking 0.17 percent of its 13F equity portfolio to MOG.
As industrywide interest jumped, specific money managers have jumped into Moog Inc (NYSE:MOG) headfirst. Fisher Asset Management, managed by Ken Fisher, created the biggest position in Moog Inc (NYSE:MOG). Fisher Asset Management had $1.9 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also initiated a $0.4 million position during the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Moog Inc (NYSE:MOG) but similarly valued. We will take a look at AllianceBernstein Holding LP (NYSE:AB), Brady Corporation (NYSE:BRC), Ameris Bancorp (NASDAQ:ABCB), and EnerSys (NYSE:ENS). All of these stocks’ market caps resemble MOG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AB | 8 | 18589 | -2 |
| BRC | 18 | 200005 | 5 |
| ABCB | 14 | 143727 | -2 |
| ENS | 17 | 90798 | 1 |
| Average | 14.25 | 113280 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $113 million. That figure was $103 million in MOG’s case. Brady Corporation (NYSE:BRC) is the most popular stock in this table. On the other hand AllianceBernstein Holding LP (NYSE:AB) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Moog Inc (NYSE:MOG) 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. Hedge funds were also right about betting on MOG, though not to the same extent, as the stock returned 6.2% during the fourth quarter (through the end of November) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
