Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about AngioDynamics, Inc. (NASDAQ:ANGO).
Is AngioDynamics, Inc. (NASDAQ:ANGO) a good investment right now? Money managers are turning bullish. The number of long hedge fund bets moved up by 1 lately. Our calculations also showed that ANGO isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Noam Gottesman, GLG Partners
Let’s take a gander at the fresh hedge fund action surrounding AngioDynamics, Inc. (NASDAQ:ANGO).
What have hedge funds been doing with AngioDynamics, Inc. (NASDAQ:ANGO)?
Heading into the second quarter of 2019, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in ANGO over the last 15 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Royce & Associates held the most valuable stake in AngioDynamics, Inc. (NASDAQ:ANGO), which was worth $15.2 million at the end of the first quarter. On the second spot was Renaissance Technologies which amassed $11.3 million worth of shares. Moreover, GLG Partners, D E Shaw, and AQR Capital Management were also bullish on AngioDynamics, Inc. (NASDAQ:ANGO), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, key money managers were breaking ground themselves. Winton Capital Management, managed by David Harding, created the most outsized position in AngioDynamics, Inc. (NASDAQ:ANGO). Winton Capital Management had $0.3 million invested in the company at the end of the quarter. Jeffrey Talpins’s Element Capital Management also initiated a $0.3 million position during the quarter. The following funds were also among the new ANGO investors: Minhua Zhang’s Weld Capital Management, Ken Griffin’s Citadel Investment Group, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s also examine hedge fund activity in other stocks similar to AngioDynamics, Inc. (NASDAQ:ANGO). We will take a look at Diebold Nixdorf Incorporated (NYSE:DBD), Systemax Inc. (NYSE:SYX), PlayAGS, Inc. (NYSE:AGS), and QAD Inc. (NASDAQ:QADA). This group of stocks’ market valuations are closest to ANGO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DBD | 18 | 166306 | 7 |
| SYX | 12 | 23366 | 1 |
| AGS | 22 | 130434 | 11 |
| QADA | 16 | 124879 | -1 |
| Average | 17 | 111246 | 4.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $111 million. That figure was $44 million in ANGO’s case. PlayAGS, Inc. (NYSE:AGS) is the most popular stock in this table. On the other hand Systemax Inc. (NYSE:SYX) is the least popular one with only 12 bullish hedge fund positions. AngioDynamics, Inc. (NASDAQ:ANGO) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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. Unfortunately ANGO wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ANGO investors were disappointed as the stock returned -14.2% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
