Out of thousands of stocks that are currently traded on the market, it is difficult to determine those that can really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of over 700 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Coherent, Inc. (NASDAQ:COHR).
Coherent, Inc. (NASDAQ:COHR) was in 17 hedge funds’ portfolios at the end of the third quarter of 2015. COHR has experienced a decrease in support from the world’s most elite money managers in recent months. There were 22 hedge funds in our database with COHR holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Genesco Inc. (NYSE:GCO), Himax Technologies, Inc. (ADR) (NASDAQ:HIMX), and CoreSite Realty Corp (NYSE:COR) to gather more data points.
Follow Coherent Inc (NASDAQ:COHR)
Follow Coherent Inc (NASDAQ:COHR)
At the moment there are a lot of tools shareholders employ to value stocks. A couple of the less utilized tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the top fund managers can outpace their index-focused peers by a solid margin (see the details here).
Now, let’s go over the latest action surrounding Coherent, Inc. (NASDAQ:COHR).
What does the smart money think about Coherent, Inc. (NASDAQ:COHR)?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 23% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the biggest position in Coherent, Inc. (NASDAQ:COHR). The fund reportedly holds a $38.6 million stake in the company, comprising 0.2% of its 13F portfolio. Coming in second is Lee Munder Capital Group, led by Lee Munder, holding a $10.8 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism consist of Jim Simons’s Renaissance Technologies, Tim Curro’s Value Holdings LP and Charles Paquelet’s Skylands Capital.
Due to the fact that Coherent, Inc. (NASDAQ:COHR) has experienced declining sentiment from hedge fund managers, we can see that there is a sect of fund managers who sold off their entire stakes in the third quarter. At the top of the heap, George Soros’s Soros Fund Management said goodbye to the largest stake of the 700 funds tracked by Insider Monkey, valued at roughly $3.9 million in stock, and Glenn Russell Dubin’s Highbridge Capital Management was right behind this move, as the fund dumped about $1.7 million worth of COHR shares. These moves are intriguing to say the least, as total hedge fund interest fell by 5 funds in the third quarter.
Let’s now review hedge fund activity in other stocks similar to Coherent, Inc. (NASDAQ:COHR). We will take a look at Genesco Inc. (NYSE:GCO), Himax Technologies, Inc. (ADR) (NASDAQ:HIMX), CoreSite Realty Corp (NYSE:COR), and Dreamworks Animation Skg Inc (NASDAQ:DWA). This group of stocks’ market valuations are similar to COHR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GCO | 12 | 106406 | 1 |
| HIMX | 11 | 85966 | -5 |
| COR | 10 | 92476 | 1 |
| DWA | 9 | 493527 | 1 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $195 million. Genesco Inc. (NYSE:GCO) is the most popular stock in this table. On the other hand Dreamworks Animation Skg Inc (NASDAQ:DWA) is the least popular one with only 9 bullish hedge fund positions. Although Coherent, Inc. (NASDAQ:COHR) has managed to attract only $74 million from hedge funds, the stock was present in 17 elite portfolios, making it the most popular among its market cap peers. Considering that hedge funds are fond of this stock, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
