“Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn’t by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today’s darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn’t attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal,” said Vilas Fund in its Q1 investor letter. We aren’t sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Grupo Aeroportuario del Sureste (NYSE:ASR).
Grupo Aeroportuario del Sureste (NYSE:ASR) was in 4 hedge funds’ portfolios at the end of September. ASR investors should be aware of a decrease in hedge fund sentiment recently. There were 7 hedge funds in our database with ASR positions at the end of the previous quarter. Our calculations also showed that ASR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
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’ 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 Russell 2000 ETFs by 40 percentage points since May 2014 (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.
Jim Simons of Renaissance Technologies
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. With all of this in mind we’re going to take a gander at the new hedge fund action regarding Grupo Aeroportuario del Sureste (NYSE:ASR).
How have hedgies been trading Grupo Aeroportuario del Sureste (NYSE:ASR)?
At Q3’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -43% from the previous quarter. By comparison, 3 hedge funds held shares or bullish call options in ASR a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the most valuable position in Grupo Aeroportuario del Sureste (NYSE:ASR), worth close to $26.1 million, amounting to less than 0.1%% of its total 13F portfolio. Coming in second is Israel Englander of Millennium Management, with a $5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish consist of Michael Moriarty’s Teewinot Capital Advisers, Cliff Asness’s AQR Capital Management and . In terms of the portfolio weights assigned to each position Teewinot Capital Advisers allocated the biggest weight to Grupo Aeroportuario del Sureste (NYSE:ASR), around 1.29% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to ASR.
Since Grupo Aeroportuario del Sureste (NYSE:ASR) has experienced bearish sentiment from hedge fund managers, it’s safe to say that there was a specific group of fund managers that elected to cut their entire stakes last quarter. It’s worth mentioning that Paul Marshall and Ian Wace’s Marshall Wace cut the largest investment of the 750 funds watched by Insider Monkey, comprising about $3.8 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund sold off about $3.6 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 3 funds last quarter.
Let’s also examine hedge fund activity in other stocks similar to Grupo Aeroportuario del Sureste (NYSE:ASR). These stocks are Ascendis Pharma A/S (NASDAQ:ASND), Intercorp Financial Services Inc. (NYSE:IFS), YY Inc (NASDAQ:YY), and First Financial Bankshares Inc (NASDAQ:FFIN). This group of stocks’ market values are closest to ASR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ASND | 33 | 2023367 | 0 |
| IFS | 3 | 9694 | 3 |
| YY | 17 | 192246 | -5 |
| FFIN | 16 | 25822 | 4 |
| Average | 17.25 | 562782 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $563 million. That figure was $38 million in ASR’s case. Ascendis Pharma A/S (NASDAQ:ASND) is the most popular stock in this table. On the other hand Intercorp Financial Services Inc. (NYSE:IFS) is the least popular one with only 3 bullish hedge fund positions. Grupo Aeroportuario del Sureste (NYSE:ASR) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on ASR as the stock returned 12.4% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
