Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Hawkins, Inc. (NASDAQ:HWKN) to find out whether there were any major changes in hedge funds’ views.
Hawkins, Inc. (NASDAQ:HWKN) was in 10 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 11. HWKN has experienced an increase in hedge fund interest lately. There were 9 hedge funds in our database with HWKN positions at the end of the first quarter. Our calculations also showed that HWKN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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Do Hedge Funds Think HWKN Is A Good Stock To Buy Now?
At Q2’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HWKN over the last 24 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Hawkins, Inc. (NASDAQ:HWKN), with a stake worth $5.7 million reported as of the end of June. Trailing Renaissance Technologies was Royce & Associates, which amassed a stake valued at $5.1 million. AQR Capital Management, GAMCO Investors, and Millennium Management 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 Zebra Capital Management allocated the biggest weight to Hawkins, Inc. (NASDAQ:HWKN), around 0.41% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, earmarking 0.03 percent of its 13F equity portfolio to HWKN.
As aggregate interest increased, specific money managers have jumped into Hawkins, Inc. (NASDAQ:HWKN) headfirst. Citadel Investment Group, managed by Ken Griffin, created the largest position in Hawkins, Inc. (NASDAQ:HWKN). Citadel Investment Group had $0.3 million invested in the company at the end of the quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Hawkins, Inc. (NASDAQ:HWKN) but similarly valued. These stocks are Transportadora de Gas del Sur SA (NYSE:TGS), Titan Machinery Inc. (NASDAQ:TITN), United Fire Group, Inc. (NASDAQ:UFCS), Ethan Allen Interiors Inc. (NYSE:ETH), TORM plc (NASDAQ:TRMD), Compugen Ltd. (NASDAQ:CGEN), and Vor Biopharma Inc. (NASDAQ:VOR). This group of stocks’ market valuations match HWKN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TGS | 8 | 11291 | 1 |
| TITN | 18 | 60948 | 6 |
| UFCS | 7 | 17983 | 2 |
| ETH | 15 | 45627 | 2 |
| TRMD | 6 | 480644 | 2 |
| CGEN | 11 | 126564 | 0 |
| VOR | 9 | 277307 | -1 |
| Average | 10.6 | 145766 | 1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.6 hedge funds with bullish positions and the average amount invested in these stocks was $146 million. That figure was $16 million in HWKN’s case. Titan Machinery Inc. (NASDAQ:TITN) is the most popular stock in this table. On the other hand TORM plc (NASDAQ:TRMD) is the least popular one with only 6 bullish hedge fund positions. Hawkins, Inc. (NASDAQ:HWKN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HWKN is 49.9. 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 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 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. A small number of hedge funds were also right about betting on HWKN as the stock returned 7% since the end of the second quarter (through 9/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
