Many investors, including Carl Icahn or Stan Druckenmiller, have been saying for a while now that the current market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the third quarter, many investors lost money due to unpredictable events such as the concerns over Valeant’s drug pricing policy that led to an overall drop among pharma stocks. Nevertheless, many of the stocks that tanked in the third quarter still sport strong fundamentals and their decline was more related to the general market sentiment rather than their individual performance and hedge funds kept their bullish stance. In this article we will find out how hedge fund sentiment to AVG Technologies NV (NYSE:AVG) changed recently.
AVG Technologies NV (NYSE:AVG) investors should pay attention to a decrease in support from the world’s most elite money managers lately. AVG was in 20 hedge funds’ portfolios at the end of the third quarter of 2015. There were 22 hedge funds in our database with AVG positions at the end of the previous quarter. At the end of this article we will also compare AVG to other stocks including Acorda Therapeutics Inc (NASDAQ:ACOR), CYS Investments Inc (NYSE:CYS), and Government Properties Income Trust (NYSE:GOV) to get a better sense of its popularity.
Follow Avg Technologies N.v. (NYSE:AVG)
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Keeping this in mind, let’s take a look at the fresh action surrounding AVG Technologies NV (NYSE:AVG).
How have hedgies been trading AVG Technologies NV (NYSE:AVG)?
Heading into Q4, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Trigran Investments, managed by Douglas T. Granat, holds the number one position in AVG Technologies NV (NYSE:AVG). Trigran Investments has a $22.6 million position in the stock, comprising 7.1% of its 13F portfolio. On Trigran Investments’s heels D E Shaw, with a $12.8 million position; less than 0.1% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions include Robert B. Gillam’s McKinley Capital Management, Bill Miller’s Legg Mason Capital Management and George McCabe’s Portolan Capital Management.
Due to the fact that AVG Technologies NV (NYSE:AVG) has witnessed a declination in interest from hedge fund managers, it’s easy to see that there were a few money managers that elected to cut their full holdings by the end of the third quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the largest investment of all the hedgies watched by Insider Monkey, totaling close to $2.7 million in stock. Roger Ibbotson’s fund, Zebra Capital Management, also dropped its stock, about $0.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 2 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as AVG Technologies NV (NYSE:AVG) but similarly valued. We will take a look at Acorda Therapeutics Inc (NASDAQ:ACOR), CYS Investments Inc (NYSE:CYS), Government Properties Income Trust (NYSE:GOV), and WestAmerica Bancorp. (NASDAQ:WABC). All of these stocks’ market caps match AVG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ACOR | 17 | 203130 | 1 |
| CYS | 8 | 5038 | 0 |
| GOV | 6 | 59473 | 0 |
| WABC | 6 | 15600 | -3 |
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $93 million in AVG’s case. Acorda Therapeutics Inc (NASDAQ:ACOR) is the most popular stock in this table. On the other hand Government Properties Income Trust (NYSE:GOV) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks AVG Technologies NV (NYSE:AVG) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
