Is ANSYS, Inc. (NASDAQ:ANSS) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
ANSYS, Inc. (NASDAQ:ANSS) shareholders have witnessed an increase in support from the world’s most elite money managers of late. Our calculations also showed that ANSS 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Cliff Asness of AQR Capital Management
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a look at the new hedge fund action encompassing ANSYS, Inc. (NASDAQ:ANSS).
Hedge fund activity in ANSYS, Inc. (NASDAQ:ANSS)
At Q3’s end, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of 12% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards ANSS over the last 17 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Robert Joseph Caruso’s Select Equity Group has the number one position in ANSYS, Inc. (NASDAQ:ANSS), worth close to $355.5 million, corresponding to 2.4% of its total 13F portfolio. On Select Equity Group’s heels is Cliff Asness of AQR Capital Management, with a $86 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish contain Brian Ashford-Russell and Tim Woolley’s Polar Capital, Barry Dargan’s Intermede Investment Partners and Greg Poole’s Echo Street Capital Management. In terms of the portfolio weights assigned to each position Crestwood Capital Management allocated the biggest weight to ANSYS, Inc. (NASDAQ:ANSS), around 7.4% of its portfolio. Intermede Investment Partners is also relatively very bullish on the stock, designating 3.96 percent of its 13F equity portfolio to ANSS.
Now, specific money managers have jumped into ANSYS, Inc. (NASDAQ:ANSS) headfirst. Impax Asset Management, managed by Ian Simm, assembled the biggest position in ANSYS, Inc. (NASDAQ:ANSS). Impax Asset Management had $51.4 million invested in the company at the end of the quarter. Dan Loeb’s Third Point also made a $34.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Panayotis Takis Sparaggis’s Alkeon Capital Management, Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors, and Israel Englander’s Millennium Management.
Let’s now take a look at hedge fund activity in other stocks similar to ANSYS, Inc. (NASDAQ:ANSS). These stocks are Church & Dwight Co., Inc. (NYSE:CHD), Altice USA, Inc. (NYSE:ATUS), Cadence Design Systems Inc (NASDAQ:CDNS), and Fortis Inc. (NYSE:FTS). This group of stocks’ market values match ANSS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CHD | 34 | 543789 | 4 |
| ATUS | 51 | 3138068 | 6 |
| CDNS | 33 | 1579724 | 5 |
| FTS | 13 | 561241 | 1 |
| Average | 32.75 | 1455706 | 4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.75 hedge funds with bullish positions and the average amount invested in these stocks was $1456 million. That figure was $883 million in ANSS’s case. Altice USA, Inc. (NYSE:ATUS) is the most popular stock in this table. On the other hand Fortis Inc. (NYSE:FTS) is the least popular one with only 13 bullish hedge fund positions. ANSYS, Inc. (NASDAQ:ANSS) 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 ANSS as the stock returned 15.1% 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.
