As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about AMETEK, Inc. (NYSE:AME).
AMETEK, Inc. (NYSE:AME) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 38 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that AME isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare AME to other stocks including Genmab A/S (NASDAQ:GMAB), Stanley Black & Decker, Inc. (NYSE:SWK), and Chewy, Inc. (NYSE:CHWY) to get a better sense of its popularity.
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 gander at the recent hedge fund action encompassing AMETEK, Inc. (NYSE:AME).
Mario Gabelli of GAMCO Investors
Do Hedge Funds Think AME Is A Good Stock To Buy Now?
At third quarter’s end, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AME over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Israel Englander’s Millennium Management has the largest position in AMETEK, Inc. (NYSE:AME), worth close to $289 million, amounting to 0.2% of its total 13F portfolio. The second most bullish fund manager is Citadel Investment Group, managed by Ken Griffin, which holds a $214.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish encompass Phill Gross and Robert Atchinson’s Adage Capital Management, Mario Gabelli’s GAMCO Investors and Francois Rochon’s Giverny Capital. In terms of the portfolio weights assigned to each position Voleon Capital allocated the biggest weight to AMETEK, Inc. (NYSE:AME), around 17.18% of its 13F portfolio. Giverny Capital is also relatively very bullish on the stock, earmarking 5.67 percent of its 13F equity portfolio to AME.
Because AMETEK, Inc. (NYSE:AME) has faced declining sentiment from the aggregate hedge fund industry, we can see that there is a sect of hedge funds who sold off their positions entirely last quarter. Intriguingly, Ray Dalio’s Bridgewater Associates said goodbye to the biggest stake of all the hedgies monitored by Insider Monkey, valued at an estimated $8.5 million in stock. Donald Sussman’s fund, Paloma Partners, also sold off its stock, about $5 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as AMETEK, Inc. (NYSE:AME) but similarly valued. These stocks are Genmab A/S (NASDAQ:GMAB), Stanley Black & Decker, Inc. (NYSE:SWK), Chewy, Inc. (NYSE:CHWY), United Microelectronics Corp (NYSE:UMC), Eversource Energy (NYSE:ES), Las Vegas Sands Corp. (NYSE:LVS), and Yandex NV (NASDAQ:YNDX). All of these stocks’ market caps are closest to AME’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GMAB | 9 | 122715 | 0 |
| SWK | 37 | 776002 | -7 |
| CHWY | 32 | 376172 | -11 |
| UMC | 13 | 151038 | 3 |
| ES | 21 | 137293 | -5 |
| LVS | 40 | 938057 | -8 |
| YNDX | 27 | 1432186 | -4 |
| Average | 25.6 | 561923 | -4.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.6 hedge funds with bullish positions and the average amount invested in these stocks was $562 million. That figure was $1320 million in AME’s case. Las Vegas Sands Corp. (NYSE:LVS) is the most popular stock in this table. On the other hand Genmab A/S (NASDAQ:GMAB) is the least popular one with only 9 bullish hedge fund positions. AMETEK, Inc. (NYSE:AME) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AME is 80.3. 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 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on AME as the stock returned 10.1% since the end of Q3 (through 11/30) 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.
