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Do Hedge Funds Love Apogee Enterprises, Inc. (APOG)?

The market has been volatile as the Federal Reserve continues its rate hikes to normalize the interest rates. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by about 4 percentage points through November 16th. SEC filings and hedge fund investor letters indicate that the smart money seems to be paring back their overall long exposure since summer months, and the funds’ movements is one of the reasons why the major indexes have retraced. In this article, we analyze what the smart money thinks of Apogee Enterprises, Inc. (NASDAQ:APOG) and find out how it is affected by hedge funds’ moves.

Apogee Enterprises, Inc. (NASDAQ:APOG) investors should pay attention to a decrease in hedge fund interest of late. APOG was in 17 hedge funds’ portfolios at the end of September. There were 20 hedge funds in our database with APOG holdings at the end of the previous quarter. Our calculations also showed that APOG isn’t among the 30 most popular stocks among hedge funds.

In today’s marketplace there are several metrics investors can use to assess stocks. A duo of the most useful metrics are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the elite investment managers can beat the market by a superb margin (see the details here).

Chuck Royce

Let’s review the key hedge fund action regarding Apogee Enterprises, Inc. (NASDAQ:APOG).

What have hedge funds been doing with Apogee Enterprises, Inc. (NASDAQ:APOG)?

Heading into the fourth quarter of 2018, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -15% from the previous quarter. On the other hand, there were a total of 12 hedge funds with a bullish position in APOG at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

APOG_dec2018

More specifically, Engaged Capital was the largest shareholder of Apogee Enterprises, Inc. (NASDAQ:APOG), with a stake worth $61.6 million reported as of the end of September. Trailing Engaged Capital was Royce & Associates, which amassed a stake valued at $46.6 million. Headlands Capital, Skylands Capital, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.

Because Apogee Enterprises, Inc. (NASDAQ:APOG) has faced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of hedge funds who sold off their full holdings heading into Q3. At the top of the heap, D. E. Shaw’s D E Shaw said goodbye to the largest investment of all the hedgies watched by Insider Monkey, totaling an estimated $3.5 million in stock, and Matthew Tewksbury’s Stevens Capital Management was right behind this move, as the fund cut about $0.9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds heading into Q3.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Apogee Enterprises, Inc. (NASDAQ:APOG) but similarly valued. We will take a look at Apollo Investment Corp. (NASDAQ:AINV), Despegar.com, Corp. (NYSE:DESP), Easterly Government Properties Inc (NYSE:DEA), and KKR Real Estate Finance Trust Inc. (NYSE:KREF). All of these stocks’ market caps match APOG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AINV 8 27015 -6
DESP 13 470216 2
DEA 8 190165 -4
KREF 8 22485 3
Average 9.25 177470 -1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $177 million. That figure was $154 million in APOG’s case. Despegar.com, Corp. (NYSE:DESP) is the most popular stock in this table. On the other hand Apollo Investment Corp. (NASDAQ:AINV) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Apogee Enterprises, Inc. (NASDAQ:APOG) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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

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