Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Aspen Technology, Inc. (NASDAQ:AZPN) .
Is Aspen Technology, Inc. (NASDAQ:AZPN) a great investment now? Money managers are really taking a bearish view. The number of bullish hedge fund bets that are revealed through the 13F filings slashed by 2 in recent months. AZPN was in 17 hedge funds’ portfolios at the end of the third quarter of 2016. There were 19 hedge funds in our database with AZPN positions at the end of the previous quarter. At the end of this article we will also compare AZPN to other stocks including Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU), Eagle Materials, Inc. (NYSE:EXP), and Investors Bancorp, Inc. (NASDAQ:ISBC) to get a better sense of its popularity.
Follow Aspentech Corp (NASDAQ:AZPN)
Follow Aspentech Corp (NASDAQ:AZPN)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, let’s check out the recent action encompassing Aspen Technology, Inc. (NASDAQ:AZPN).
What have hedge funds been doing with Aspen Technology, Inc. (NASDAQ:AZPN)?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 11% from the second quarter of 2016. On the other hand, there were a total of 26 hedge funds with a bullish position in AZPN at the beginning of this year. So, let’s see 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, Ken Fisher’s Fisher Asset Management holds the most valuable position in Aspen Technology, Inc. (NASDAQ:AZPN) which has a $105.2 million position in the stock. On Fisher Asset Management’s heels is Ryan Pedlow’s Two Creeks Capital Management which holds a $96.6 million position; 5.9% of its 13F portfolio is allocated to the stock. Other professional money managers that are bullish consist of Jim Simons’ Renaissance Technologies, Mick Hellman’s HMI Capital and Panayotis Takis Sparaggis’ Alkeon Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Due to the fact that Aspen Technology, Inc. (NASDAQ:AZPN) has weathered bearish sentiment from hedge fund managers, logic holds that there exists a select few hedge funds that slashed their positions entirely last quarter. It’s worth mentioning that Josh Goldberg’s G2 Investment Partners Management said goodbye to the largest stake of the 700 funds followed by Insider Monkey, totaling an estimated $1.2 million in call options, and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital was right behind this move, as the fund said goodbye to about $1.1 million worth of shares.
Let’s go over hedge fund activity in other stocks similar to Aspen Technology, Inc. (NASDAQ:AZPN). These stocks are Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU), Eagle Materials, Inc. (NYSE:EXP), Investors Bancorp, Inc. (NASDAQ:ISBC), and VWR Corp (NASDAQ:VWR). This group of stocks’ market caps are similar to AZPN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CCU | 10 | 52657 | 0 |
| EXP | 29 | 477022 | 0 |
| ISBC | 23 | 610037 | -1 |
| VWR | 26 | 288144 | 5 |
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $357 million. That figure was $434 million in AZPN’s case. Eagle Materials, Inc. (NYSE:EXP) is the most popular stock in this table. On the other hand Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU) is the least popular one with only 10 bullish hedge fund positions. Aspen Technology, Inc. (NASDAQ:AZPN) 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. In this regard EXP might be a better candidate to consider taking a long position in.
Disclosure: None
