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Did Hedge Funds Drop The Ball On Astronics Corporation (ATRO) ?

Does Astronics Corporation (NASDAQ:ATRO) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.

Astronics Corporation (NASDAQ:ATRO) investors should be aware of an increase in enthusiasm from smart money recently. Our calculations also showed that ATRO isn’t among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

BlueMountain Capital Management's Returns, AUM and Holdings

Let’s take a glance at the latest hedge fund action regarding Astronics Corporation (NASDAQ:ATRO).

How are hedge funds trading Astronics Corporation (NASDAQ:ATRO)?

At Q1’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 86% from the previous quarter. By comparison, 8 hedge funds held shares or bullish call options in ATRO a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).

ATRO_jun2019

Among these funds, International Value Advisers held the most valuable stake in Astronics Corporation (NASDAQ:ATRO), which was worth $52.4 million at the end of the first quarter. On the second spot was ACK Asset Management which amassed $31.9 million worth of shares. Moreover, Millennium Management, Royce & Associates, and Citadel Investment Group were also bullish on Astronics Corporation (NASDAQ:ATRO), allocating a large percentage of their portfolios to this stock.

As aggregate interest increased, specific money managers were leading the bulls’ herd. Minerva Advisors, managed by David P. Cohen, initiated the biggest position in Astronics Corporation (NASDAQ:ATRO). Minerva Advisors had $1.1 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $0.6 million position during the quarter. The other funds with brand new ATRO positions are D. E. Shaw’s D E Shaw, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, and Jim Simons’s Renaissance Technologies.

Let’s check out hedge fund activity in other stocks similar to Astronics Corporation (NASDAQ:ATRO). We will take a look at Piper Jaffray Companies (NYSE:PJC), Five Point Holdings, LLC (NYSE:FPH), Cray Inc. (NASDAQ:CRAY), and Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA). This group of stocks’ market values match ATRO’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PJC 8 46296 3
FPH 16 273200 0
CRAY 19 71237 5
LTRPA 23 279113 3
Average 16.5 167462 2.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $167 million. That figure was $104 million in ATRO’s case. Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA) is the most popular stock in this table. On the other hand Piper Jaffray Companies (NYSE:PJC) is the least popular one with only 8 bullish hedge fund positions. Astronics Corporation (NASDAQ:ATRO) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on ATRO as the stock returned 18.8% during the same time frame and outperformed the market by an even larger margin.

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

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