The elite funds run by legendary investors such as David Tepper and Dan Loeb make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentives to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Evoqua Water Technologies Corp. (NYSE:AQUA) from the perspective of those elite funds.
Evoqua Water Technologies Corp. (NYSE:AQUA) has experienced an increase in support from the world’s most elite money managers lately. AQUA was in 12 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 11 hedge funds in our database with AQUA positions at the end of the previous quarter. Our calculations also showed that aqua isn’t among the 30 most popular stocks among hedge funds.
According to most shareholders, hedge funds are assumed to be unimportant, old investment vehicles of years past. While there are greater than 8000 funds in operation at present, Our researchers look at the upper echelon of this group, approximately 750 funds. It is estimated that this group of investors oversee bulk of the hedge fund industry’s total asset base, and by monitoring their unrivaled equity investments, Insider Monkey has unearthed a number of investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship hedge fund strategy surpassed the S&P 500 index by nearly 5 percentage points a year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
We’re going to check out the latest hedge fund action regarding Evoqua Water Technologies Corp. (NYSE:AQUA).
What have hedge funds been doing with Evoqua Water Technologies Corp. (NYSE:AQUA)?
At Q4’s end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in AQUA a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, P2 Capital Partners, managed by Claus Moller, holds the most valuable position in Evoqua Water Technologies Corp. (NYSE:AQUA). P2 Capital Partners has a $43.7 million position in the stock, comprising 4.4% of its 13F portfolio. Coming in second is SG Capital Management, managed by Ken Grossman and Glen Schneider, which holds a $10.3 million position; 3.1% of its 13F portfolio is allocated to the stock. Some other members of the smart money that are bullish include Philip Hempleman’s Ardsley Partners, Paul Marshall and Ian Wace’s Marshall Wace LLP and Paul Tudor Jones’s Tudor Investment Corp.
As aggregate interest increased, specific money managers have jumped into Evoqua Water Technologies Corp. (NYSE:AQUA) headfirst. P2 Capital Partners, managed by Claus Moller, created the most valuable position in Evoqua Water Technologies Corp. (NYSE:AQUA). P2 Capital Partners had $43.7 million invested in the company at the end of the quarter. Ken Grossman and Glen Schneider’s SG Capital Management also initiated a $10.3 million position during the quarter. The other funds with new positions in the stock are Philip Hempleman’s Ardsley Partners, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Jim Simons’s Renaissance Technologies.
Let’s check out hedge fund activity in other stocks similar to Evoqua Water Technologies Corp. (NYSE:AQUA). We will take a look at James River Group Holdings Ltd (NASDAQ:JRVR), CBIZ, Inc. (NYSE:CBZ), National Western Life Group, Inc. (NASDAQ:NWLI), and Amerisafe, Inc. (NASDAQ:AMSF). All of these stocks’ market caps are closest to AQUA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JRVR | 10 | 37026 | 2 |
| CBZ | 12 | 146494 | -3 |
| NWLI | 9 | 17248 | 2 |
| AMSF | 11 | 14091 | 0 |
| Average | 10.5 | 53715 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $83 million in AQUA’s case. CBIZ, Inc. (NYSE:CBZ) is the most popular stock in this table. On the other hand National Western Life Group, Inc. (NASDAQ:NWLI) is the least popular one with only 9 bullish hedge fund positions. Evoqua Water Technologies Corp. (NYSE:AQUA) is not the most popular stock in this group but hedge fund interest is still above average. 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 AQUA as the stock returned 45.2% 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.
