We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards Acuity Brands, Inc. (NYSE:AYI), and what that likely means for the prospects of the company and its stock.
Is Acuity Brands, Inc. (NYSE:AYI) a buy, sell, or hold? Investors who are in the know are selling. The number of bullish hedge fund bets fell by 2 recently. At the end of this article we will also compare AYI to other stocks including Vantiv Inc (NYSE:VNTV), SCANA Corporation (NYSE:SCG), and ServiceNow Inc (NYSE:NOW) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What have hedge funds been doing with Acuity Brands, Inc. (NYSE:AYI)?
Heading into the fourth quarter of 2016, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, an 8% drop from the second quarter of 2016. After a steep drop in ownership in Q1, the stock regained some momentum in Q2 but was unable to build on it in Q3. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Robert Joseph Caruso’s Select Equity Group has the biggest position in Acuity Brands, Inc. (NYSE:AYI), worth close to $305.6 million, corresponding to 2.6% of its total 13F portfolio. The second most bullish fund manager is Phill Gross and Robert Atchinson of Adage Capital Management, with a $53.7 million position. Other peers that hold long positions consist of Principal Global Investors’ Columbus Circle Investors, John Overdeck and David Siegel’s Two Sigma Advisors and Cliff Asness’ AQR Capital Management.