Hedge funds run by legendary names like George Soros and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant outperformance. That’s why we pay special attention to hedge fund activity in these stocks.
Is Advanced Energy Industries, Inc. (NASDAQ:AEIS) worth your attention right now? Prominent investors are becoming more confident. The number of long hedge fund bets advanced by 2 in recent months. Our calculations also showed that aeis isn’t among the 30 most popular stocks among hedge funds. AEIS was in 17 hedge funds’ portfolios at the end of March. There were 15 hedge funds in our database with AEIS holdings at the end of the previous quarter.
At the moment there are many formulas investors employ to value stocks. Two of the less known formulas are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the elite money managers can trounce the S&P 500 by a solid amount (see the details here).
Let’s review the fresh hedge fund action encompassing Advanced Energy Industries, Inc. (NASDAQ:AEIS).
Hedge fund activity in Advanced Energy Industries, Inc. (NASDAQ:AEIS)
Heading into the second quarter of 2019, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from one quarter earlier. By comparison, 23 hedge funds held shares or bullish call options in AEIS a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Advanced Energy Industries, Inc. (NASDAQ:AEIS), which was worth $71.8 million at the end of the first quarter. On the second spot was Royce & Associates which amassed $34.2 million worth of shares. Moreover, GLG Partners, Arrowstreet Capital, and Two Sigma Advisors were also bullish on Advanced Energy Industries, Inc. (NASDAQ:AEIS), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, key money managers have jumped into Advanced Energy Industries, Inc. (NASDAQ:AEIS) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the biggest position in Advanced Energy Industries, Inc. (NASDAQ:AEIS). Arrowstreet Capital had $7.2 million invested in the company at the end of the quarter. Jeffrey Moskowitz’s Harvey Partners also made a $1 million investment in the stock during the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Advanced Energy Industries, Inc. (NASDAQ:AEIS). These stocks are Inovalon Holdings Inc (NASDAQ:INOV), Moelis & Company (NYSE:MC), Northwest Natural Holding Company (NYSE:NWN), and Dillard’s, Inc. (NYSE:DDS). This group of stocks’ market valuations match AEIS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INOV | 9 | 27824 | -4 |
| MC | 23 | 122559 | 2 |
| NWN | 11 | 68749 | 1 |
| DDS | 28 | 154651 | 14 |
| Average | 17.75 | 93446 | 3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $93 million. That figure was $150 million in AEIS’s case. Dillard’s, Inc. (NYSE:DDS) is the most popular stock in this table. On the other hand Inovalon Holdings Inc (NASDAQ:INOV) is the least popular one with only 9 bullish hedge fund positions. Advanced Energy Industries, Inc. (NASDAQ:AEIS) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on AEIS as the stock returned 7.4% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
