Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we pay special attention to the hedge fund activity in the small-cap space.
AECOM (NYSE:ACM) was in 21 hedge funds’ portfolios at the end of the first quarter of 2019. ACM shareholders have witnessed an increase in activity from the world’s largest hedge funds of late. There were 18 hedge funds in our database with ACM positions at the end of the previous quarter. Our calculations also showed that acm isn’t among the 30 most popular stocks among hedge funds.
According to most market participants, hedge funds are seen as slow, old investment vehicles of years past. While there are more than 8000 funds in operation at the moment, Our experts choose to focus on the moguls of this club, approximately 750 funds. These money managers have their hands on most of all hedge funds’ total asset base, and by shadowing their matchless equity investments, Insider Monkey has come up with numerous investment strategies that have historically outperformed the broader indices. Insider Monkey’s flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period.
We’re going to take a peek at the latest hedge fund action encompassing AECOM (NYSE:ACM).
How have hedgies been trading AECOM (NYSE:ACM)?
At Q1’s end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ACM over the last 15 quarters. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Jonathan Barrett and Paul Segal’s Luminus Management has the most valuable position in AECOM (NYSE:ACM), worth close to $155.1 million, accounting for 3.3% of its total 13F portfolio. Coming in second is Pzena Investment Management, managed by Richard S. Pzena, which holds a $79.5 million position; 0.4% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish contain Edgar Wachenheim’s Greenhaven Associates, Martin D. Sass’s MD Sass and Steve Cohen’s Point72 Asset Management.
Consequently, key money managers have jumped into AECOM (NYSE:ACM) headfirst. Point72 Asset Management, managed by Steve Cohen, initiated the biggest position in AECOM (NYSE:ACM). Point72 Asset Management had $19.1 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $12.1 million position during the quarter. The following funds were also among the new ACM investors: Glenn Russell Dubin’s Highbridge Capital Management, David Costen Haley’s HBK Investments, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as AECOM (NYSE:ACM) but similarly valued. These stocks are Healthequity Inc (NASDAQ:HQY), TFS Financial Corporation (NASDAQ:TFSL), PacWest Bancorp (NASDAQ:PACW), and Axis Capital Holdings Limited (NYSE:AXS). This group of stocks’ market values match ACM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HQY | 22 | 134839 | 4 |
| TFSL | 7 | 143387 | 0 |
| PACW | 21 | 237543 | 0 |
| AXS | 31 | 767401 | 1 |
| Average | 20.25 | 320793 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $321 million. That figure was $379 million in ACM’s case. Axis Capital Holdings Limited (NYSE:AXS) is the most popular stock in this table. On the other hand TFS Financial Corporation (NASDAQ:TFSL) is the least popular one with only 7 bullish hedge fund positions. AECOM (NYSE:ACM) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on ACM as the stock returned 5.9% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
