Axis Capital Holdings Limited (AXS): Are Hedge Funds Right About This Stock?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Axis Capital Holdings Limited (NYSE:AXS) in this article.

Axis Capital Holdings Limited (NYSE:AXS) has experienced an increase in enthusiasm from smart money of late. Axis Capital Holdings Limited (NYSE:AXS) was in 26 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 35. Our calculations also showed that AXS 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. With all of this in mind we’re going to take a glance at the key hedge fund action regarding Axis Capital Holdings Limited (NYSE:AXS).

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

At the end of September, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 37% from the second quarter of 2021. By comparison, 23 hedge funds held shares or bullish call options in AXS a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

The largest stake in Axis Capital Holdings Limited (NYSE:AXS) was held by Pzena Investment Management, which reported holding $327 million worth of stock at the end of September. It was followed by Paradice Investment Management with a $80.4 million position. Other investors bullish on the company included Citadel Investment Group, Royce & Associates, and Wallace Capital Management. In terms of the portfolio weights assigned to each position Paradice Investment Management allocated the biggest weight to Axis Capital Holdings Limited (NYSE:AXS), around 3.64% of its 13F portfolio. Wallace Capital Management is also relatively very bullish on the stock, designating 2.94 percent of its 13F equity portfolio to AXS.

Now, key money managers have jumped into Axis Capital Holdings Limited (NYSE:AXS) headfirst. Levin Capital Strategies, managed by John A. Levin, established the largest position in Axis Capital Holdings Limited (NYSE:AXS). Levin Capital Strategies had $14.4 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors also made a $10.1 million investment in the stock during the quarter. The other funds with brand new AXS positions are Daniel Johnson’s Gillson Capital, Steve Cohen’s Point72 Asset Management, and Jinghua Yan’s TwinBeech Capital.

Let’s now review hedge fund activity in other stocks similar to Axis Capital Holdings Limited (NYSE:AXS). These stocks are Casella Waste Systems Inc. (NASDAQ:CWST), Alarm.com Holdings Inc (NASDAQ:ALRM), Leslie’s, Inc. (NASDAQ:LESL), SiTime Corporation (NASDAQ:SITM), BankUnited Inc (NYSE:BKU), Datto Holding Corp. (NYSE:MSP), and Recursion Pharmaceuticals Inc. (NASDAQ:RXRX). This group of stocks’ market caps are closest to AXS’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.6 hedge funds with bullish positions and the average amount invested in these stocks was $614 million. That figure was $620 million in AXS’s case. Leslie’s, Inc. (NASDAQ:LESL) is the most popular stock in this table. On the other hand Datto Holding Corp. (NYSE:MSP) is the least popular one with only 11 bullish hedge fund positions. Axis Capital Holdings Limited (NYSE:AXS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AXS is 69.8. 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 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 still beat the market by 5.1 percentage points. Hedge funds were also right about betting on AXS as the stock returned 14.7% since the end of Q3 (through 12/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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