The fourth quarter was a rough one for most investors, as fears of a rising interest rate environment in the U.S, a trade war with China, and a more or less stagnant Europe, weighed heavily on the minds of investors. Both the S&P 500 and Russell 2000 sank as a result, with the Russell 2000, which is composed of smaller companies, being hit especially hard. This was primarily due to hedge funds, which are big supporters of small-cap stocks, pulling some of their capital out of the volatile markets during this time. Let’s look at how this market volatility affected the sentiment of hedge funds towards HEICO Corporation (NYSE:HEI), and what that likely means for the prospects of the company and its stock.
HEICO Corporation (NYSE:HEI) has seen an increase in activity from the world’s largest hedge funds of late. Our calculations also showed that hei isn’t among the 30 most popular stocks among hedge funds.
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We’re going to take a gander at the key hedge fund action regarding HEICO Corporation (NYSE:HEI).
What have hedge funds been doing with HEICO Corporation (NYSE:HEI)?
At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in HEI over the last 13 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
The largest stake in HEICO Corporation (NYSE:HEI) was held by Select Equity Group, which reported holding $162.9 million worth of stock at the end of September. It was followed by Fisher Asset Management with a $147.2 million position. Other investors bullish on the company included Renaissance Technologies, Select Equity Group, and Royce & Associates.
As aggregate interest increased, key money managers have jumped into HEICO Corporation (NYSE:HEI) headfirst. Millennium Management, managed by Israel Englander, created the largest position in HEICO Corporation (NYSE:HEI). Millennium Management had $5.5 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also initiated a $5.2 million position during the quarter. The other funds with new positions in the stock are Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Glenn Russell Dubin’s Highbridge Capital Management, and Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as HEICO Corporation (NYSE:HEI) but similarly valued. We will take a look at HollyFrontier Corporation (NYSE:HFC), Seattle Genetics, Inc. (NASDAQ:SGEN), Teleflex Incorporated (NYSE:TFX), and F5 Networks, Inc. (NASDAQ:FFIV). This group of stocks’ market values resemble HEI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HFC | 26 | 627597 | 1 |
| SGEN | 15 | 4295030 | -3 |
| TFX | 17 | 728223 | -11 |
| FFIV | 24 | 919666 | -2 |
| Average | 20.5 | 1642629 | -3.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $1.64 billion. That figure was $867 million in HEI’s case. HollyFrontier Corporation (NYSE:HFC) is the most popular stock in this table. On the other hand Seattle Genetics, Inc. (NASDAQ:SGEN) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks HEICO Corporation (NYSE:HEI) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
