Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed in recent years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that certain hedge funds do have great stock picking skills (and we can identify these hedge funds in advance pretty accurately), so let’s take a glance at the smart money sentiment towards Vishay Precision Group Inc (NYSE:VPG).
Vishay Precision Group Inc (NYSE:VPG) has experienced a decrease in enthusiasm from smart money recently. Our calculations also showed that VPG isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s review the key hedge fund action regarding Vishay Precision Group Inc (NYSE:VPG).
What have hedge funds been doing with Vishay Precision Group Inc (NYSE:VPG)?
Heading into the first quarter of 2019, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards VPG over the last 14 quarters. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in Vishay Precision Group Inc (NYSE:VPG) was held by Nokomis Capital, which reported holding $58.8 million worth of stock at the end of December. It was followed by Renaissance Technologies with a $22.1 million position. Other investors bullish on the company included Royce & Associates, Millennium Management, and D E Shaw.
Judging by the fact that Vishay Precision Group Inc (NYSE:VPG) has witnessed bearish sentiment from the smart money, it’s easy to see that there were a few hedge funds who were dropping their entire stakes heading into Q3. It’s worth mentioning that Ernest Chow and Jonathan Howe’s Sensato Capital Management dumped the largest stake of the “upper crust” of funds watched by Insider Monkey, valued at close to $1.5 million in stock. Peter Algert and Kevin Coldiron’s fund, Algert Coldiron Investors, also dropped its stock, about $0.6 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 2 funds heading into Q3.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Vishay Precision Group Inc (NYSE:VPG) but similarly valued. We will take a look at Osmotica Pharmaceuticals plc (NASDAQ:OSMT), Kimball Electronics Inc (NASDAQ:KE), Quanterix Corporation (NASDAQ:QTRX), and DBV Technologies SA – ADR (NASDAQ:DBVT). All of these stocks’ market caps resemble VPG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OSMT | 9 | 32627 | 9 |
| KE | 7 | 24598 | -2 |
| QTRX | 7 | 30607 | 0 |
| DBVT | 5 | 42725 | -4 |
| Average | 7 | 32639 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $114 million in VPG’s case. Osmotica Pharmaceuticals plc (NASDAQ:OSMT) is the most popular stock in this table. On the other hand DBV Technologies SA – ADR (NASDAQ:DBVT) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Vishay Precision Group Inc (NYSE:VPG) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on VPG, though not to the same extent, as the stock returned 21.8% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
