Hedge Funds Have Never Been This Bullish On Veoneer, Inc. (VNE)

We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Melvin Capital’s recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Veoneer, Inc. (NASDAQ:VNE).

Veoneer, Inc. (NASDAQ:VNE) has seen an increase in hedge fund interest of late. Veoneer, Inc. (NASDAQ:VNE) was in 24 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 14. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 12 hedge funds in our database with VNE positions at the end of the second quarter. Our calculations also showed that VNE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Dmitry Balyasny of Balyasny Asset Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to take a look at the new hedge fund action surrounding Veoneer, Inc. (NASDAQ:VNE).

Do Hedge Funds Think VNE Is A Good Stock To Buy Now?

At the end of September, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from the second quarter of 2021. On the other hand, there were a total of 10 hedge funds with a bullish position in VNE a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Cevian Capital held the most valuable stake in Veoneer, Inc. (NASDAQ:VNE), which was worth $273.3 million at the end of the third quarter. On the second spot was Segantii Capital which amassed $37.2 million worth of shares. Balyasny Asset Management, Magnetar Capital, and Millennium 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 Cevian Capital allocated the biggest weight to Veoneer, Inc. (NASDAQ:VNE), around 35.05% of its 13F portfolio. Havens Advisors is also relatively very bullish on the stock, dishing out 2.54 percent of its 13F equity portfolio to VNE.

Now, specific money managers were breaking ground themselves. Segantii Capital, managed by Simon Sadler, assembled the most valuable position in Veoneer, Inc. (NASDAQ:VNE). Segantii Capital had $37.2 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $28.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Alec Litowitz and Ross Laser’s Magnetar Capital, John Orrico’s Water Island Capital, and Israel Englander’s Millennium Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Veoneer, Inc. (NASDAQ:VNE) but similarly valued. We will take a look at Perficient, Inc. (NASDAQ:PRFT), ImmunityBio, Inc. (NASDAQ:IBRX), Asbury Automotive Group, Inc. (NYSE:ABG), First Hawaiian, Inc. (NASDAQ:FHB), Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC), Focus Financial Partners Inc. (NASDAQ:FOCS), and PennyMac Financial Services Inc (NYSE:PFSI). All of these stocks’ market caps are similar to VNE’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.1 hedge funds with bullish positions and the average amount invested in these stocks was $317 million. That figure was $439 million in VNE’s case. PennyMac Financial Services Inc (NYSE:PFSI) is the most popular stock in this table. On the other hand ImmunityBio, Inc. (NASDAQ:IBRX) is the least popular one with only 5 bullish hedge fund positions. Veoneer, Inc. (NASDAQ:VNE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VNE is 73.9. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately VNE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on VNE were disappointed as the stock returned 3.3% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.

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