We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of ABM Industries, Inc. (NYSE:ABM) based on that data.
Is ABM Industries, Inc. (NYSE:ABM) a buy right now? The smart money is getting more bullish. The number of bullish hedge fund positions increased by 6 lately. Our calculations also showed that ABM 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.
To the average investor there are several formulas investors put to use to assess publicly traded companies. A pair of the less known formulas are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can outpace the S&P 500 by a very impressive margin (see the details here).
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. With all of this in mind we’re going to check out the key hedge fund action regarding ABM Industries, Inc. (NYSE:ABM).
What have hedge funds been doing with ABM Industries, Inc. (NYSE:ABM)?
At Q1’s end, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from one quarter earlier. On the other hand, there were a total of 8 hedge funds with a bullish position in ABM a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in ABM Industries, Inc. (NYSE:ABM) was held by Royce & Associates, which reported holding $10.7 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $10.4 million position. Other investors bullish on the company included Millennium Management, Renaissance Technologies, and D E Shaw. In terms of the portfolio weights assigned to each position Quantinno Capital allocated the biggest weight to ABM Industries, Inc. (NYSE:ABM), around 0.2% of its 13F portfolio. Engineers Gate Manager is also relatively very bullish on the stock, designating 0.16 percent of its 13F equity portfolio to ABM.
As one would reasonably expect, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, assembled the biggest position in ABM Industries, Inc. (NYSE:ABM). Millennium Management had $7.6 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $2.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Greg Eisner’s Engineers Gate Manager, Mika Toikka’s AlphaCrest Capital Management, and Michael Gelband’s ExodusPoint Capital.
Let’s also examine hedge fund activity in other stocks similar to ABM Industries, Inc. (NYSE:ABM). These stocks are Columbia Financial, Inc. (NASDAQ:CLBK), SPS Commerce, Inc. (NASDAQ:SPSC), Targa Resources Corp (NYSE:TRGP), and LATAM Airlines Group S.A. (NYSE:LTM). This group of stocks’ market valuations match ABM’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 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $73 million. That figure was $47 million in ABM’s case. Targa Resources Corp (NYSE:TRGP) is the most popular stock in this table. On the other hand Columbia Financial, Inc. (NASDAQ:CLBK) is the least popular one with only 10 bullish hedge fund positions. ABM Industries, Inc. (NYSE:ABM) is not the most popular stock in this group but hedge fund interest is still above average. 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 but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on ABM as the stock returned 61.4% in Q2 (through June 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.