Is Avnet, Inc. (NYSE:AVT) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Avnet, Inc. an excellent investment today? Money managers are buying. The number of bullish hedge fund positions advanced by 4 recently. At the end of this article we will also compare AVT to other stocks, including United Rentals, Inc. (NYSE:URI), Tableau Software Inc (NYSE:DATA), and Commscope Holding Company Inc (NASDAQ:COMM) to get a better sense of its popularity.
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In the financial world there are many tools investors have at their disposal to value their holdings. A pair of the most underrated tools are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the top fund managers can outperform their index-focused peers by a significant margin (see the details here).
Now, let’s take a peek at the latest action encompassing Avnet, Inc. (NYSE:AVT).
What have hedge funds been doing with Avnet, Inc. (NYSE:AVT)?
At the end of the third quarter, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Pzena Investment Management, managed by Richard S. Pzena, holds the number one position in Avnet, Inc. (NYSE:AVT). Pzena Investment Management has a $241.7 million position in the stock, comprising 1.5% of its 13F portfolio. The second largest stake is held by Clifton S. Robbins’ Blue Harbour Group, with a $229.2 million position; the fund has 7.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism consist of Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, Cliff Asness’ AQR Capital Management and Clint Carlson’s Carlson Capital.
As aggregate interest increased, key money managers have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the biggest position in Avnet, Inc. (NYSE:AVT). Arrowstreet Capital had $7 million invested in the company at the end of the quarter. Neil Chriss’ Hutchin Hill Capital also initiated a $5.4 million position during the quarter. The following funds were also among the new AVT investors: Peter Muller’s PDT Partners, Thomas Bailard’s Bailard Inc and David Costen Haley’s HBK Investments.
Let’s now take a look at hedge fund activity in other stocks similar to Avnet, Inc. (NYSE:AVT). These stocks are United Rentals, Inc. (NYSE:URI), Tableau Software Inc (NYSE:DATA), Commscope Holding Company Inc (NASDAQ:COMM), and The Valspar Corporation (NYSE:VAL). This group of stocks’ market valuations are closest to AVT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| URI | 52 | 782952 | 8 |
| DATA | 45 | 1154797 | 6 |
| COMM | 41 | 2006967 | 3 |
| VAL | 19 | 531031 | 0 |
As you can see these stocks had an average of 39 hedge funds with bullish positions and the average amount invested in these stocks was $1.12 billion, compared to $782 million in AVT’s case. United Rentals, Inc. (NYSE:URI) is the most popular stock in this table. On the other hand The Valspar Corporation (NYSE:VAL) is the least popular one with only 19 bullish hedge fund positions. Avnet, Inc. (NYSE:AVT) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard URI might be a better candidate to consider a long position.
