We can judge whether Aspen Technology, Inc. (NASDAQ:AZPN) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
Aspen Technology, Inc. (NASDAQ:AZPN) was in 26 hedge funds’ portfolios at the end of June. AZPN has seen an increase in hedge fund sentiment recently. There were 25 hedge funds in our database with AZPN positions at the end of the previous quarter. Our calculations also showed that AZPN isn’t among the 30 most popular stocks among hedge funds (view the video below) .
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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’ 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 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a glance at the new hedge fund action regarding Aspen Technology, Inc. (NASDAQ:AZPN).
What have hedge funds been doing with Aspen Technology, Inc. (NASDAQ:AZPN)?
At the end of the second quarter, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AZPN over the last 16 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Aspen Technology, Inc. (NASDAQ:AZPN), which was worth $339.4 million at the end of the second quarter. On the second spot was Fisher Asset Management which amassed $213.5 million worth of shares. Moreover, Alkeon Capital Management, Citadel Investment Group, and Two Creeks Capital Management were also bullish on Aspen Technology, Inc. (NASDAQ:AZPN), allocating a large percentage of their portfolios to this stock.
Consequently, key hedge funds were breaking ground themselves. Laurion Capital Management, managed by Benjamin A. Smith, initiated the largest position in Aspen Technology, Inc. (NASDAQ:AZPN). Laurion Capital Management had $4.5 million invested in the company at the end of the quarter. David Andre and Astro Teller’s Cerebellum Capital also made a $0.3 million investment in the stock during the quarter. The other funds with brand new AZPN positions are Michael Platt and William Reeves’s BlueCrest Capital Mgmt. and Claes Fornell’s CSat Investment Advisory.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Aspen Technology, Inc. (NASDAQ:AZPN) but similarly valued. These stocks are F5 Networks, Inc. (NASDAQ:FFIV), Euronet Worldwide, Inc. (NASDAQ:EEFT), The Western Union Company (NYSE:WU), and National Retail Properties, Inc. (NYSE:NNN). This group of stocks’ market values are similar to AZPN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FFIV | 23 | 1083984 | -1 |
| EEFT | 33 | 409978 | 0 |
| WU | 23 | 383896 | 3 |
| NNN | 16 | 217203 | 4 |
| Average | 23.75 | 523765 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.75 hedge funds with bullish positions and the average amount invested in these stocks was $524 million. That figure was $1272 million in AZPN’s case. Euronet Worldwide, Inc. (NASDAQ:EEFT) is the most popular stock in this table. On the other hand National Retail Properties, Inc. (NYSE:NNN) is the least popular one with only 16 bullish hedge fund positions. Aspen Technology, Inc. (NASDAQ:AZPN) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately AZPN wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on AZPN were disappointed as the stock returned -1% during the third quarter 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
