We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like American Woodmark Corporation (NASDAQ:AMWD).
Is American Woodmark Corporation (NASDAQ:AMWD) a healthy stock for your portfolio? Hedge funds are becoming more confident. The number of long hedge fund positions went up by 4 in recent months. Our calculations also showed that AMWD isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). AMWD was in 13 hedge funds’ portfolios at the end of September. There were 9 hedge funds in our database with AMWD positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are tons of methods investors employ to analyze publicly traded companies. A duo of the best methods are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the best money managers can beat the S&P 500 by a significant amount (see the details here).
Chuck Royce of Royce & Associates
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a peek at the latest hedge fund action surrounding American Woodmark Corporation (NASDAQ:AMWD).
What have hedge funds been doing with American Woodmark Corporation (NASDAQ:AMWD)?
At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 44% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AMWD over the last 17 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Royce & Associates, managed by Chuck Royce, holds the largest position in American Woodmark Corporation (NASDAQ:AMWD). Royce & Associates has a $15.5 million position in the stock, comprising 0.1% of its 13F portfolio. On Royce & Associates’s heels is Citadel Investment Group, managed by Ken Griffin, which holds a $8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish contain Israel Englander’s Millennium Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Renaissance Technologies. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to American Woodmark Corporation (NASDAQ:AMWD), around 0.14% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, setting aside 0.14 percent of its 13F equity portfolio to AMWD.
As aggregate interest increased, key money managers were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the biggest position in American Woodmark Corporation (NASDAQ:AMWD). Arrowstreet Capital had $4.4 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $2 million position during the quarter. The following funds were also among the new AMWD investors: Paul Marshall and Ian Wace’s Marshall Wace, Cliff Asness’s AQR Capital Management, and Benjamin A. Smith’s Laurion Capital Management.
Let’s go over hedge fund activity in other stocks similar to American Woodmark Corporation (NASDAQ:AMWD). We will take a look at Brookfield Property REIT Inc. (NASDAQ:BPR), Uniti Group Inc. (NASDAQ:UNIT), Berkshire Hills Bancorp, Inc. (NYSE:BHLB), and Kulicke and Soffa Industries Inc. (NASDAQ:KLIC). All of these stocks’ market caps resemble AMWD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BPR | 14 | 60227 | -2 |
| UNIT | 22 | 172932 | 1 |
| BHLB | 10 | 39828 | 1 |
| KLIC | 19 | 255818 | 2 |
| Average | 16.25 | 132201 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $132 million. That figure was $42 million in AMWD’s case. Uniti Group Inc. (NASDAQ:UNIT) is the most popular stock in this table. On the other hand Berkshire Hills Bancorp, Inc. (NYSE:BHLB) is the least popular one with only 10 bullish hedge fund positions. American Woodmark Corporation (NASDAQ:AMWD) 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on AMWD as the stock returned 15.7% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
