Where Do Hedge Funds Stand On Woodward Inc (WWD)?

Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to the smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Woodward Inc (NASDAQ:WWD)? The smart money sentiment can provide an answer to this question.

Woodward Inc (NASDAQ:WWD) has seen an increase in activity from the world’s largest hedge funds recently. Woodward Inc (NASDAQ:WWD) was in 25 hedge funds’ portfolios at the end of September. The all time high for this statistic is 28. There were 22 hedge funds in our database with WWD positions at the end of the second quarter. Our calculations also showed that WWD isn’t among the 30 most popular stocks among hedge funds (click for Q3 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. Keeping this in mind let’s review the fresh hedge fund action regarding Woodward Inc (NASDAQ:WWD).

Frank Brosens of Taconic Capital

Do Hedge Funds Think WWD Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from one quarter earlier. On the other hand, there were a total of 24 hedge funds with a bullish position in WWD a year ago. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Deccan Value Advisors, managed by Vinit Bodas, holds the most valuable position in Woodward Inc (NASDAQ:WWD). Deccan Value Advisors has a $228 million position in the stock, comprising 9% of its 13F portfolio. Coming in second is Boykin Curry of Eagle Capital Management, with a $217.4 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other peers that hold long positions include Joseph Samuels’s Islet Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Deccan Value Advisors allocated the biggest weight to Woodward Inc (NASDAQ:WWD), around 9.02% of its 13F portfolio. Sandbar Asset Management is also relatively very bullish on the stock, designating 1.85 percent of its 13F equity portfolio to WWD.

As industrywide interest jumped, key money managers have jumped into Woodward Inc (NASDAQ:WWD) headfirst. Islet Management, managed by Joseph Samuels, established the most outsized call position in Woodward Inc (NASDAQ:WWD). Islet Management had $39.6 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $26.8 million position during the quarter. The other funds with brand new WWD positions are Michael Cowley’s Sandbar Asset Management, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Frank Brosens’s Taconic Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Woodward Inc (NASDAQ:WWD) but similarly valued. These stocks are WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), Pure Storage, Inc. (NYSE:PSTG), Pinnacle Financial Partners, Inc. (NASDAQ:PNFP), Omega Healthcare Investors Inc (NYSE:OHI), Janus Henderson Group plc (NYSE:JHG), Stifel Financial Corp. (NYSE:SF), and Donaldson Company, Inc. (NYSE:DCI). This group of stocks’ market values match WWD’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.9 hedge funds with bullish positions and the average amount invested in these stocks was $704 million. That figure was $660 million in WWD’s case. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is the most popular stock in this table. On the other hand Omega Healthcare Investors Inc (NYSE:OHI) is the least popular one with only 15 bullish hedge fund positions. Woodward Inc (NASDAQ:WWD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WWD is 47. 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 negative signal and 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 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately WWD wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); WWD investors were disappointed as the stock returned -4.6% since the end of September (through 12/9) 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 most of these stocks already outperformed the market in 2021.

Suggested Articles:

• 25 Most Climate-Resilient Cities in the US
• 25 Best Things To Buy On Amazon Under 20
• 12 Best Genomic Stocks to Buy Now

Disclosure: None. This article was originally published at Insider Monkey.