Is Arcimoto, Inc. (NASDAQ:FUV) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is FUV a good stock to buy? Arcimoto, Inc. (NASDAQ:FUV) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds’ portfolios at the end of the first quarter of 2021. Our calculations also showed that FUV isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as DURECT Corporation (NASDAQ:DRRX), Yellow Corporation (NASDAQ:YELL), and Eagle Bulk Shipping Inc. (NASDAQ:EGLE) to gather more data points.
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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Michael Gelband of ExodusPoint Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s review the recent hedge fund action surrounding Arcimoto, Inc. (NASDAQ:FUV).
Do Hedge Funds Think FUV Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 1 hedge funds with a bullish position in FUV 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.
The largest stake in Arcimoto, Inc. (NASDAQ:FUV) was held by Millennium Management, which reported holding $5.4 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $2.8 million position. Other investors bullish on the company included OZ Management, Citadel Investment Group, and ExodusPoint Capital. In terms of the portfolio weights assigned to each position OZ Management allocated the biggest weight to Arcimoto, Inc. (NASDAQ:FUV), around 0.02% of its 13F portfolio. ExodusPoint Capital is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to FUV.
Because Arcimoto, Inc. (NASDAQ:FUV) has faced a decline in interest from the entirety of the hedge funds we track, we can see that there is a sect of fund managers that elected to cut their entire stakes in the first quarter. Intriguingly, Ari Zweiman’s 683 Capital Partners said goodbye to the biggest position of all the hedgies watched by Insider Monkey, worth an estimated $0.3 million in stock. David Nguyen and Nancy Oh’s fund, One68 Global Capital, also sold off its stock, about $0.1 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Arcimoto, Inc. (NASDAQ:FUV) but similarly valued. We will take a look at DURECT Corporation (NASDAQ:DRRX), Yellow Corporation (NASDAQ:YELL), Eagle Bulk Shipping Inc. (NASDAQ:EGLE), Regis Corporation (NYSE:RGS), Computer Programs & Systems, Inc. (NASDAQ:CPSI), Benefitfocus Inc (NASDAQ:BNFT), and Fusion Pharmaceuticals Inc. (NASDAQ:FUSN). This group of stocks’ market caps resemble FUV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DRRX | 10 | 47350 | 2 |
| YELL | 18 | 50177 | 3 |
| EGLE | 12 | 259614 | 5 |
| RGS | 10 | 173310 | -3 |
| CPSI | 9 | 13950 | -4 |
| BNFT | 17 | 103471 | 3 |
| FUSN | 9 | 110659 | -3 |
| Average | 12.1 | 108362 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.1 hedge funds with bullish positions and the average amount invested in these stocks was $108 million. That figure was $11 million in FUV’s case. Yellow Corporation (NASDAQ:YELL) is the most popular stock in this table. On the other hand Computer Programs & Systems, Inc. (NASDAQ:CPSI) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Arcimoto, Inc. (NASDAQ:FUV) is even less popular than CPSI. Our overall hedge fund sentiment score for FUV is 35. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th but managed to beat the market by 6.1 percentage points. A small number of hedge funds were also right about betting on FUV, though not to the same extent, as the stock returned 11.3% since the end of March (through June 18th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
