Hedge Funds Are Betting On Intevac, Inc. (IVAC)

Does Intevac, Inc. (NASDAQ:IVAC) 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.

Is Intevac, Inc. (NASDAQ:IVAC) a superb stock to buy now? Money managers are in an optimistic mood. The number of bullish hedge fund positions increased by 1 lately. Our calculations also showed that IVAC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

To the average investor there are a large number of formulas market participants employ to size up publicly traded companies. A couple of the most under-the-radar formulas are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the best investment managers can outpace the broader indices by a healthy amount (see the details here).

David Harding

David Harding of Winton Capital Management

We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Now we’re going to take a look at the new hedge fund action surrounding Intevac, Inc. (NASDAQ:IVAC).

What have hedge funds been doing with Intevac, Inc. (NASDAQ:IVAC)?

At Q3’s end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the second quarter of 2019. On the other hand, there were a total of 12 hedge funds with a bullish position in IVAC a year ago. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).

The largest stake in Intevac, Inc. (NASDAQ:IVAC) was held by Royce & Associates, which reported holding $10.2 million worth of stock at the end of September. It was followed by Becker Drapkin Management with a $5.3 million position. Other investors bullish on the company included Renaissance Technologies, Ancora Advisors, and Winton Capital Management. In terms of the portfolio weights assigned to each position Becker Drapkin Management allocated the biggest weight to Intevac, Inc. (NASDAQ:IVAC), around 7.07% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, earmarking 0.09 percent of its 13F equity portfolio to IVAC.

As aggregate interest increased, specific money managers were breaking ground themselves. Winton Capital Management, managed by David Harding, established the largest position in Intevac, Inc. (NASDAQ:IVAC). Winton Capital Management had $0.4 million invested in the company at the end of the quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Intevac, Inc. (NASDAQ:IVAC) but similarly valued. These stocks are VAALCO Energy, Inc. (NYSE:EGY), Allied Esports Entertainment, Inc. (NASDAQ:AESE), Pyxus International, Inc. (NYSE:PYX), and Gaia, Inc. (NASDAQ:GAIA). This group of stocks’ market caps match IVAC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EGY 8 15400 0
AESE 3 2088 -6
PYX 5 7889 -5
GAIA 6 12663 -3
Average 5.5 9510 -3.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $20 million in IVAC’s case. VAALCO Energy, Inc. (NYSE:EGY) is the most popular stock in this table. On the other hand Allied Esports Entertainment, Inc. (NASDAQ:AESE) is the least popular one with only 3 bullish hedge fund positions. Intevac, Inc. (NASDAQ:IVAC) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on IVAC as the stock returned 13.9% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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