Hedge Funds Are Crazy About Academy Sports and Outdoors, Inc. (ASO)

In this article you are going to find out whether hedge funds think Academy Sports and Outdoors, Inc. (NASDAQ:ASO) 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.

Academy Sports and Outdoors, Inc. (NASDAQ:ASO) was in 48 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 45. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. ASO has experienced an increase in hedge fund sentiment in recent months. There were 45 hedge funds in our database with ASO holdings at the end of June. Our calculations also showed that ASO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks 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. With all of this in mind let’s take a glance at the fresh hedge fund action surrounding Academy Sports and Outdoors, Inc. (NASDAQ:ASO).

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

At the end of September, a total of 48 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ASO over the last 25 quarters. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

Among these funds, Samlyn Capital held the most valuable stake in Academy Sports and Outdoors, Inc. (NASDAQ:ASO), which was worth $216.5 million at the end of the third quarter. On the second spot was Maverick Capital which amassed $105.5 million worth of shares. Arrowstreet Capital, D E Shaw, and Armistice Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Six Columns Capital allocated the biggest weight to Academy Sports and Outdoors, Inc. (NASDAQ:ASO), around 11.78% of its 13F portfolio. Steamboat Capital Partners is also relatively very bullish on the stock, setting aside 5.45 percent of its 13F equity portfolio to ASO.

As industrywide interest jumped, key money managers were leading the bulls’ herd. Samlyn Capital, managed by Robert Pohly, established the largest call position in Academy Sports and Outdoors, Inc. (NASDAQ:ASO). Samlyn Capital had $48.2 million invested in the company at the end of the quarter. Joseph Samuels’s Islet Management also initiated a $40 million position during the quarter. The other funds with brand new ASO positions are Peter S. Park’s Park West Asset Management, Gregg Moskowitz’s Interval Partners, and Douglas Dossey and Arthur Young’s Tensile Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Academy Sports and Outdoors, Inc. (NASDAQ:ASO) but similarly valued. We will take a look at Onto Innovation Inc. (NYSE:ONTO), The Macerich Company (NYSE:MAC), Dillard’s, Inc. (NYSE:DDS), Lexington Realty Trust (NYSE:LXP), Lyell Immunopharma Inc. (NASDAQ:LYEL), iHeartMedia, Inc. (NASDAQ:IHRT), and FirstCash, Inc. (NASDAQ:FCFS). This group of stocks’ market caps are closest to ASO’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.3 hedge funds with bullish positions and the average amount invested in these stocks was $228 million. That figure was $1213 million in ASO’s case. iHeartMedia, Inc. (NASDAQ:IHRT) is the most popular stock in this table. On the other hand The Macerich Company (NYSE:MAC) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Academy Sports and Outdoors, Inc. (NASDAQ:ASO) is more popular among hedge funds. Our overall hedge fund sentiment score for ASO is 88. 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 returned 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on ASO as the stock returned 11.5% since the end of September (through 11/30) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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