Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of XPEL Inc. (NASDAQ:XPEL) based on that data.
Is XPEL a good stock to buy now? XPEL Inc. (NASDAQ:XPEL) investors should pay attention to a decrease in activity from the world’s largest hedge funds recently. XPEL Inc. (NASDAQ:XPEL) was in 22 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 24. Our calculations also showed that XPEL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Now let’s take a look at the key hedge fund action surrounding XPEL Inc. (NASDAQ:XPEL).
Ken Griffin of Citadel Investment Group
Do Hedge Funds Think XPEL Is A Good Stock To Buy Now?
At the end of September, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from one quarter earlier. By comparison, 12 hedge funds held shares or bullish call options in XPEL 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.
More specifically, Cowbird Capital was the largest shareholder of XPEL Inc. (NASDAQ:XPEL), with a stake worth $29.1 million reported as of the end of September. Trailing Cowbird Capital was Bares Capital Management, which amassed a stake valued at $27.7 million. Driehaus Capital, Kent Lake Capital, and Citadel Investment Group 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 Cowbird Capital allocated the biggest weight to XPEL Inc. (NASDAQ:XPEL), around 9.98% of its 13F portfolio. Kent Lake Capital is also relatively very bullish on the stock, setting aside 7.31 percent of its 13F equity portfolio to XPEL.
Judging by the fact that XPEL Inc. (NASDAQ:XPEL) has experienced bearish sentiment from the smart money, it’s safe to say that there was a specific group of hedgies who sold off their full holdings by the end of the third quarter. Intriguingly, Joseph Cornell’s Bluegrass Capital Partners dropped the biggest stake of the 750 funds followed by Insider Monkey, valued at close to $8.4 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dumped its stock, about $5.3 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 2 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as XPEL Inc. (NASDAQ:XPEL) but similarly valued. We will take a look at Washington Real Estate Investment Trust (NYSE:WRE), loanDepot, Inc. (NYSE:LDI), Plains GP Holdings LP (NASDAQ:PAGP), ArcBest Corp (NASDAQ:ARCB), LumiraDx Limited (NASDAQ:LMDX), Repay Holdings Corporation (NASDAQ:RPAY), and InterDigital, Inc. (NASDAQ:IDCC). This group of stocks’ market values are similar to XPEL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WRE | 4 | 41606 | -3 |
| LDI | 4 | 5775 | 0 |
| PAGP | 12 | 73984 | -3 |
| ARCB | 22 | 155160 | -1 |
| LMDX | 15 | 17357 | 15 |
| RPAY | 14 | 124761 | -3 |
| IDCC | 14 | 170040 | -5 |
| Average | 12.1 | 84098 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.1 hedge funds with bullish positions and the average amount invested in these stocks was $84 million. That figure was $146 million in XPEL’s case. ArcBest Corp (NASDAQ:ARCB) is the most popular stock in this table. On the other hand Washington Real Estate Investment Trust (NYSE:WRE) is the least popular one with only 4 bullish hedge fund positions. XPEL Inc. (NASDAQ:XPEL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for XPEL is 80.5. 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 positive signal but 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately XPEL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on XPEL were disappointed as the stock returned -10% since the end of September (through 12/31) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
