Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The time period between June 25 and the end of October was one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller cap stocks, they have seen some volatility in their portfolios too. Actually, their moves are potentially one of the factors that contributed to this volatility. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of ANSYS, Inc. (NASDAQ:ANSS).
Is ANSYS, Inc. (NASDAQ:ANSS) undervalued? Investors who are in the know are buying. The number of long hedge fund positions went up by 3 in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as IHS Inc. (NYSE:IHS), Polaris Industries Inc. (NYSE:PII), and Unum Group (NYSE:UNM) to gather more data points.
In today’s marketplace, there are plenty of gauges market participants can use to assess their holdings. A couple of the most innovative gauges are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the best investment managers can outperform the broader indices by a solid margin (see the details here).
Keeping this in mind, we’re going to review the key action regarding ANSYS, Inc. (NASDAQ:ANSS).
What have hedge funds been doing with ANSYS, Inc. (NASDAQ:ANSS)?
At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 18% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, David Blood and Al Gore’s Generation Investment Management has the most valuable position in ANSYS, Inc. (NASDAQ:ANSS), worth close to $258.5 million, corresponding to 3.7% of its total 13F portfolio. Coming in second is Select Equity Group, led by Robert Joseph Caruso, holding a $78.6 million position; 0.7% of its 13F portfolio is allocated to the company. Other members of the smart money with similar optimism consist of Brian Bares’ Bares Capital Management, Chuck Royce’s Royce & Associates, and Charles Akre’s Akre Capital Management.