Insider Monkey finished processing more than 738 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2019. In this article we are going to take a look at smart money sentiment towards ANSYS, Inc. (NASDAQ:ANSS).
Is ANSYS, Inc. (NASDAQ:ANSS) a great investment today? The smart money is in a pessimistic mood. The number of bullish hedge fund bets shrunk by 1 in recent months. Our calculations also showed that ANSS isn’t among the 30 most popular stocks among hedge funds. ANSS was in 28 hedge funds’ portfolios at the end of March. There were 29 hedge funds in our database with ANSS positions at the end of the previous quarter.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let’s review the new hedge fund action encompassing ANSYS, Inc. (NASDAQ:ANSS).
How are hedge funds trading ANSYS, Inc. (NASDAQ:ANSS)?
At the end of the first quarter, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the previous quarter. By comparison, 27 hedge funds held shares or bullish call options in ANSS a year ago. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Among these funds, Select Equity Group held the most valuable stake in ANSYS, Inc. (NASDAQ:ANSS), which was worth $358.2 million at the end of the first quarter. On the second spot was Polar Capital which amassed $74.7 million worth of shares. Moreover, Marshall Wace LLP, AQR Capital Management, and Intermede Investment Partners were also bullish on ANSYS, Inc. (NASDAQ:ANSS), allocating a large percentage of their portfolios to this stock.
Due to the fact that ANSYS, Inc. (NASDAQ:ANSS) has witnessed a decline in interest from hedge fund managers, we can see that there is a sect of hedge funds who were dropping their entire stakes heading into Q3. It’s worth mentioning that Steve Cohen’s Point72 Asset Management dumped the biggest position of the 700 funds watched by Insider Monkey, valued at about $22 million in stock. Chuck Royce’s fund, Royce & Associates, also sold off its stock, about $7.7 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 1 funds heading into Q3.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as ANSYS, Inc. (NASDAQ:ANSS) but similarly valued. We will take a look at Brookfield Property REIT Inc. (NASDAQ:BPR), Ryanair Holdings plc (NASDAQ:RYAAY), Laboratory Corp. of America Holdings (NYSE:LH), and Darden Restaurants, Inc. (NYSE:DRI). This group of stocks’ market values are closest to ANSS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BPR | 15 | 85268 | 1 |
| RYAAY | 18 | 429319 | 9 |
| LH | 39 | 1198920 | 1 |
| DRI | 38 | 1016976 | 1 |
| Average | 27.5 | 682621 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.5 hedge funds with bullish positions and the average amount invested in these stocks was $683 million. That figure was $838 million in ANSS’s case. Laboratory Corp. of America Holdings (NYSE:LH) is the most popular stock in this table. On the other hand Brookfield Property REIT Inc. (NASDAQ:BPR) is the least popular one with only 15 bullish hedge fund positions. ANSYS, Inc. (NASDAQ:ANSS) 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 ANSS, though not to the same extent, as the stock returned -1.1% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
