The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of Avnet, Inc. (NASDAQ:AVT).
Is AVT a good stock to buy? Prominent investors were getting more optimistic. The number of long hedge fund positions rose by 2 in recent months. Avnet, Inc. (NASDAQ:AVT) was in 31 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 33. Our calculations also showed that AVT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most stock holders, hedge funds are seen as slow, outdated financial tools of yesteryear. While there are over 8000 funds trading at the moment, We choose to focus on the elite of this club, about 850 funds. These investment experts direct the lion’s share of all hedge funds’ total capital, and by tracking their matchless picks, Insider Monkey has brought to light several investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Bernard Horn of Polaris Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 website. With all of this in mind let’s take a peek at the latest hedge fund action encompassing Avnet, Inc. (NASDAQ:AVT).
Do Hedge Funds Think AVT Is A Good Stock To Buy Now?
At third quarter’s end, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from the second quarter of 2020. By comparison, 31 hedge funds held shares or bullish call options in AVT a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Among these funds, Pzena Investment Management held the most valuable stake in Avnet, Inc. (NASDAQ:AVT), which was worth $309.2 million at the end of the third quarter. On the second spot was AQR Capital Management which amassed $39.6 million worth of shares. Arrowstreet Capital, Polaris Capital Management, and Renaissance Technologies were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Pzena Investment Management allocated the biggest weight to Avnet, Inc. (NASDAQ:AVT), around 1.93% of its 13F portfolio. Polaris Capital Management is also relatively very bullish on the stock, dishing out 1.11 percent of its 13F equity portfolio to AVT.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Cinctive Capital Management, managed by Richard SchimeláandáLawrence Sapanski, created the biggest position in Avnet, Inc. (NASDAQ:AVT). Cinctive Capital Management had $4.2 million invested in the company at the end of the quarter. Mark Coe’s Intrinsic Edge Capital also initiated a $1.3 million position during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Donald Sussman’s Paloma Partners, and Qing Li’s Sciencast Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Avnet, Inc. (NASDAQ:AVT) but similarly valued. These stocks are TTEC Holdings, Inc. (NASDAQ:TTEC), Insperity Inc (NYSE:NSP), United States Cellular Corporation (NYSE:USM), SINA Corp (NASDAQ:SINA), Afya Limited (NASDAQ:AFYA), Progyny, Inc. (NASDAQ:PGNY), and Chart Industries, Inc. (NASDAQ:GTLS). This group of stocks’ market valuations resemble AVT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TTEC | 14 | 42342 | 2 |
| NSP | 24 | 224616 | -5 |
| USM | 13 | 92934 | -3 |
| SINA | 22 | 176746 | 6 |
| AFYA | 6 | 52155 | 0 |
| PGNY | 20 | 116628 | 1 |
| GTLS | 20 | 223347 | -2 |
| Average | 17 | 132681 | -0.1 |
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 $133 million. That figure was $544 million in AVT’s case. Insperity Inc (NYSE:NSP) is the most popular stock in this table. On the other hand Afya Limited (NASDAQ:AFYA) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Avnet, Inc. (NASDAQ:AVT) is more popular among hedge funds. Our overall hedge fund sentiment score for AVT is 85.2. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 33.3% in 2020 through December 18th but still managed to beat the market by 16.4 percentage points. Hedge funds were also right about betting on AVT as the stock returned 32% since the end of September (through 12/18) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
