In this article you are going to find out whether hedge funds think A10 Networks Inc (NYSE:ATEN) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
A10 Networks Inc (NYSE:ATEN) shareholders have witnessed an increase in hedge fund interest lately. Our calculations also showed that ATEN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most traders, hedge funds are viewed as unimportant, outdated financial vehicles of the past. While there are over 8000 funds in operation at present, Our experts look at the masters of this group, around 850 funds. These hedge fund managers oversee most of the hedge fund industry’s total capital, and by keeping track of their inimitable equity investments, Insider Monkey has spotted many investment strategies that have historically defeated the market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s go over the fresh hedge fund action surrounding A10 Networks Inc (NYSE:ATEN).
What have hedge funds been doing with A10 Networks Inc (NYSE:ATEN)?
Heading into the second quarter of 2020, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. On the other hand, there were a total of 18 hedge funds with a bullish position in ATEN a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Eric Singer’s VIEX Capital Advisors has the number one position in A10 Networks Inc (NYSE:ATEN), worth close to $49 million, amounting to 58.8% of its total 13F portfolio. The second most bullish fund manager is Cynthia Paul of Lynrock Lake, with a $17.8 million position; 1.8% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions contain Renaissance Technologies, Chuck Royce’s Royce & Associates and Steven Baughman’s Divisar Capital. In terms of the portfolio weights assigned to each position VIEX Capital Advisors allocated the biggest weight to A10 Networks Inc (NYSE:ATEN), around 58.8% of its 13F portfolio. Roumell Asset Management is also relatively very bullish on the stock, designating 9.43 percent of its 13F equity portfolio to ATEN.
As aggregate interest increased, key money managers have jumped into A10 Networks Inc (NYSE:ATEN) headfirst. Algert Coldiron Investors, managed by Peter Algert and Kevin Coldiron, initiated the most valuable position in A10 Networks Inc (NYSE:ATEN). Algert Coldiron Investors had $0.8 million invested in the company at the end of the quarter. Mario Gabelli’s GAMCO Investors also made a $0.2 million investment in the stock during the quarter. The following funds were also among the new ATEN investors: Greg Eisner’s Engineers Gate Manager, Peter Muller’s PDT Partners, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as A10 Networks Inc (NYSE:ATEN) but similarly valued. We will take a look at Vermilion Energy Inc (NYSE:VET), RPT Realty (NYSE:RPT), Assembly Biosciences Inc (NASDAQ:ASMB), and Century Communities, Inc (NYSE:CCS). This group of stocks’ market valuations match ATEN’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $63 million. That figure was $110 million in ATEN’s case. Assembly Biosciences Inc (NASDAQ:ASMB) is the most popular stock in this table. On the other hand Vermilion Energy Inc (NYSE:VET) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks A10 Networks Inc (NYSE:ATEN) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. Unfortunately ATEN wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ATEN were disappointed as the stock returned 15.7% during the second quarter (through June 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.