Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren't timid and registered double digit market beating gains. Financials, energy and industrial stocks aren't doing great but many of the stocks that delivered strong returns since March are still going very strong and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment to AngioDynamics, Inc. (NASDAQ:ANGO) changed recently.
Is ANGO a good stock to buy now? AngioDynamics, Inc. (NASDAQ:ANGO) investors should pay attention to an increase in support from the world's most elite money managers lately. AngioDynamics, Inc. (NASDAQ:ANGO) was in 14 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 23. There were 10 hedge funds in our database with ANGO positions at the end of the second quarter. Our calculations also showed that ANGO isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
David Siegel of Two Sigma Advisors
David Siegel of Two Sigma Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we're going to take a look at the latest hedge fund action surrounding AngioDynamics, Inc. (NASDAQ:ANGO).
Do Hedge Funds Think ANGO Is A Good Stock To Buy Now?
At Q3's end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 40% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ANGO over the last 21 quarters. With hedgies' capital changing hands, there exists a few key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Is ANGO A Good Stock To Buy?
More specifically, Renaissance Technologies was the largest shareholder of AngioDynamics, Inc. (NASDAQ:ANGO), with a stake worth $11.9 million reported as of the end of September. Trailing Renaissance Technologies was Millennium Management, which amassed a stake valued at $7.3 million. Parian Global Management, D E Shaw, and Two Sigma Advisors 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 Parian Global Management allocated the biggest weight to AngioDynamics, Inc. (NASDAQ:ANGO), around 1.33% of its 13F portfolio. Factorial Partners is also relatively very bullish on the stock, designating 0.52 percent of its 13F equity portfolio to ANGO.
Now, specific money managers have jumped into AngioDynamics, Inc. (NASDAQ:ANGO) headfirst. Parian Global Management, managed by Zachary Miller, assembled the most valuable position in AngioDynamics, Inc. (NASDAQ:ANGO). Parian Global Management had $4.2 million invested in the company at the end of the quarter. Mark Coe's Intrinsic Edge Capital also initiated a $1.2 million position during the quarter. The other funds with brand new ANGO positions are Ken Griffin's Citadel Investment Group and Stephen DuBois's Camber Capital Management.
Let's check out hedge fund activity in other stocks similar to AngioDynamics, Inc. (NASDAQ:ANGO). We will take a look at Energy Recovery, Inc. (NASDAQ:ERII), Watford Holdings Ltd. (NASDAQ:WTRE), American Software, Inc. (NASDAQ:AMSWA), Inventiva S.A. (NASDAQ:IVA), Ennis, Inc. (NYSE:EBF), Bank First National Corporation (NASDAQ:BFC), and Digi International Inc. (NASDAQ:DGII). This group of stocks' market caps match ANGO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ERII,11,54125,-1 WTRE,11,16288,5 AMSWA,11,40697,-1 IVA,8,26719,8 EBF,8,62311,-2 BFC,1,18,-1 DGII,11,40764,0 Average,8.7,34417,1.1 [/table]
As you can see these stocks had an average of 8.7 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $37 million in ANGO's case. Energy Recovery, Inc. (NASDAQ:ERII) is the most popular stock in this table. On the other hand Bank First National Corporation (NASDAQ:BFC) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks AngioDynamics, Inc. (NASDAQ:ANGO) is more popular among hedge funds. Our overall hedge fund sentiment score for ANGO is 77.3. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 32.9% in 2020 through December 8th but still managed to beat the market by 16.2 percentage points. Hedge funds were also right about betting on ANGO as the stock returned 26.5% since the end of September (through 12/8) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
