A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended December 31st, so let’s proceed with the discussion of the hedge fund sentiment on Cognex Corporation (NASDAQ:CGNX).
Is CGNX stock a buy? Prominent investors were getting more bullish. The number of bullish hedge fund bets advanced by 3 lately. Cognex Corporation (NASDAQ:CGNX) was in 31 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 28. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CGNX isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Cliff Asness of AQR Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this biotech stock. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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. Keeping this in mind let’s take a look at the recent hedge fund action surrounding Cognex Corporation (NASDAQ:CGNX).
Do Hedge Funds Think CGNX Is A Good Stock To Buy Now?
At fourth quarter’s end, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. By comparison, 24 hedge funds held shares or bullish call options in CGNX a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Cognex Corporation (NASDAQ:CGNX) was held by Fundsmith LLP, which reported holding $128.8 million worth of stock at the end of December. It was followed by Royce & Associates with a $66.4 million position. Other investors bullish on the company included AQR Capital Management, Polar Capital, and Montanaro Asset Management. In terms of the portfolio weights assigned to each position Montanaro Asset Management allocated the biggest weight to Cognex Corporation (NASDAQ:CGNX), around 5.11% of its 13F portfolio. Navellier & Associates is also relatively very bullish on the stock, designating 1.5 percent of its 13F equity portfolio to CGNX.
As aggregate interest increased, key money managers were breaking ground themselves. Montanaro Asset Management, managed by Charles Montanaro, established the most outsized position in Cognex Corporation (NASDAQ:CGNX). Montanaro Asset Management had $30.3 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $3.6 million investment in the stock during the quarter. The other funds with brand new CGNX positions are Mikal Patel’s Oribel Capital Management, Robert Karr’s Joho Capital, and Qing Li’s Sciencast Management.
Let’s now take a look at hedge fund activity in other stocks similar to Cognex Corporation (NASDAQ:CGNX). We will take a look at Godaddy Inc (NYSE:GDDY), Imperial Oil Limited (NYSE:IMO), PTC Inc (NASDAQ:PTC), Avalara, Inc. (NYSE:AVLR), Westinghouse Air Brake Technologies Corporation (NYSE:WAB), Wix.Com Ltd (NASDAQ:WIX), and Liberty Global plc (NASDAQ:LBTYA). All of these stocks’ market caps are closest to CGNX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GDDY | 44 | 2610164 | 0 |
| IMO | 8 | 20725 | -3 |
| PTC | 38 | 1802897 | -1 |
| AVLR | 56 | 1313766 | 10 |
| WAB | 45 | 2348711 | 7 |
| WIX | 37 | 999707 | 1 |
| LBTYA | 36 | 1123404 | 1 |
| Average | 37.7 | 1459911 | 2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 37.7 hedge funds with bullish positions and the average amount invested in these stocks was $1460 million. That figure was $383 million in CGNX’s case. Avalara, Inc. (NYSE:AVLR) is the most popular stock in this table. On the other hand Imperial Oil Limited (NYSE:IMO) is the least popular one with only 8 bullish hedge fund positions. Cognex Corporation (NASDAQ:CGNX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CGNX is 62. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and surpassed the market again by 1.5 percentage points. Unfortunately CGNX wasn’t nearly as popular as these 30 stocks (hedge fund sentiment was quite bearish); CGNX investors were disappointed as the stock returned 5.1% since the end of December (through 4/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Follow Cognex Corp (NASDAQ:CGNX)
Follow Cognex Corp (NASDAQ:CGNX)
Disclosure: None. This article was originally published at Insider Monkey.
