Do Hedge Funds Love Avient Corporation (AVNT)?

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 Avient Corporation (NYSE:AVNT) in this article.

Is Avient Corporation (NYSE:AVNT) a buy right now? Hedge funds were getting less bullish. The number of bullish hedge fund bets shrunk by 4 in recent months. Avient Corporation (NYSE:AVNT) was in 20 hedge funds’ portfolios at the end of June. The all time high for this statistic is 28. Our calculations also showed that AVNT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, plant based food market is expected to explode 100-fold by 2050, so we are checking out this under-the-radar stock. We go through lists like the 10 best growth stocks to buy 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to check out the latest hedge fund action regarding Avient Corporation (NYSE:AVNT).

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

Heading into the third quarter of 2021, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AVNT over the last 24 quarters. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

The largest stake in Avient Corporation (NYSE:AVNT) was held by P2 Capital Partners, which reported holding $64.3 million worth of stock at the end of June. It was followed by Scopus Asset Management with a $28 million position. Other investors bullish on the company included Renaissance Technologies, GMT Capital, and Appian Way Asset Management. In terms of the portfolio weights assigned to each position P2 Capital Partners allocated the biggest weight to Avient Corporation (NYSE:AVNT), around 4.83% of its 13F portfolio. Appian Way Asset Management is also relatively very bullish on the stock, designating 3.72 percent of its 13F equity portfolio to AVNT.

Seeing as Avient Corporation (NYSE:AVNT) has faced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of fund managers that slashed their full holdings in the second quarter. Intriguingly, Paul Marshall and Ian Wace’s Marshall Wace LLP said goodbye to the biggest stake of the “upper crust” of funds monitored by Insider Monkey, worth an estimated $43.7 million in stock. Donald Sussman’s fund, Paloma Partners, also cut its stock, about $1.2 million worth. These moves are important to note, as aggregate hedge fund interest fell by 4 funds in the second quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Avient Corporation (NYSE:AVNT) but similarly valued. We will take a look at Terreno Realty Corporation (NYSE:TRNO), Semtech Corporation (NASDAQ:SMTC), Oscar Health, Inc. (NYSE:OSCR), BRF SA (NYSE:BRFS), Grupo Simec S.A.B. de C.V. (NYSE:SIM), Navistar International Corp (NYSE:NAV), and UniFirst Corp (NYSE:UNF). This group of stocks’ market values resemble AVNT’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.7 hedge funds with bullish positions and the average amount invested in these stocks was $415 million. That figure was $146 million in AVNT’s case. Semtech Corporation (NASDAQ:SMTC) is the most popular stock in this table. On the other hand Grupo Simec S.A.B. de C.V. (NYSE:SIM) is the least popular one with only 1 bullish hedge fund positions. Avient Corporation (NYSE:AVNT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AVNT is 57.6. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on AVNT as the stock returned 9.2% since the end of Q2 (through 10/22) 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.