After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Ayro, Inc. (NASDAQ:AYRO).
Is AYRO stock a buy here? Ayro, Inc. (NASDAQ:AYRO) has experienced an increase in hedge fund interest in recent months. Ayro, Inc. (NASDAQ:AYRO) was in 5 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that AYRO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
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. With all of this in mind let’s view the new hedge fund action regarding Ayro, Inc. (NASDAQ:AYRO).
Do Hedge Funds Think AYRO Is A Good Stock To Buy Now?
At first quarter’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 67% from one quarter earlier. By comparison, 0 hedge funds held shares or bullish call options in AYRO a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in Ayro, Inc. (NASDAQ:AYRO) was held by Citadel Investment Group, which reported holding $3.1 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $2 million position. Other investors bullish on the company included Millennium Management, Schonfeld Strategic Advisors, and D E Shaw. In terms of the portfolio weights assigned to each position Schonfeld Strategic Advisors allocated the biggest weight to Ayro, Inc. (NASDAQ:AYRO), around 0.0025% of its 13F portfolio. LMR Partners is also relatively very bullish on the stock, setting aside 0.0016 percent of its 13F equity portfolio to AYRO.
As one would reasonably expect, key money managers have jumped into Ayro, Inc. (NASDAQ:AYRO) headfirst. Schonfeld Strategic Advisors, managed by Ryan Tolkin (CIO), initiated the largest position in Ayro, Inc. (NASDAQ:AYRO). Schonfeld Strategic Advisors had $0.2 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $0.1 million position during the quarter. The only other fund with a brand new AYRO position is Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Ayro, Inc. (NASDAQ:AYRO) but similarly valued. We will take a look at Corvus Gold Inc. (NASDAQ:KOR), Postal Realty Trust, Inc. (NYSE:PSTL), Mid Penn Bancorp (NASDAQ:MPB), Genasys Inc. (NASDAQ:GNSS), LSI Industries, Inc. (NASDAQ:LYTS), Irsa Inversiones y Rprsntcins SA (NYSE:IRS), and Red Violet, Inc. (NASDAQ:RDVT). All of these stocks’ market caps are similar to AYRO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KOR | 2 | 41675 | -1 |
| PSTL | 9 | 34785 | 1 |
| MPB | 4 | 4162 | 2 |
| GNSS | 7 | 21868 | 1 |
| LYTS | 12 | 29644 | 1 |
| IRS | 3 | 15269 | -2 |
| RDVT | 3 | 32917 | -1 |
| Average | 5.7 | 25760 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.7 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $4 million in AYRO’s case. LSI Industries, Inc. (NASDAQ:LYTS) is the most popular stock in this table. On the other hand Corvus Gold Inc. (NASDAQ:KOR) is the least popular one with only 2 bullish hedge fund positions. Ayro, Inc. (NASDAQ:AYRO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AYRO is 52. 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. 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 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 and surpassed the market again by 6.1 percentage points. Unfortunately AYRO wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); AYRO investors were disappointed as the stock returned -18.4% since the end of March (through 6/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Ayro Inc. (NASDAQ:AYRO)
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Disclosure: None. This article was originally published at Insider Monkey.