Hedge Funds Are Piling Into Coherent, Inc. (COHR)

In this article we will check out the progression of hedge fund sentiment towards Coherent, Inc. (NASDAQ:COHR) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Coherent, Inc. (NASDAQ:COHR) was in 43 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 41. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. COHR has experienced an increase in hedge fund sentiment lately. There were 41 hedge funds in our database with COHR positions at the end of the first quarter. Our calculations also showed that COHR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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

At second quarter’s end, a total of 43 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards COHR over the last 24 quarters. 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 Coherent, Inc. (NASDAQ:COHR) was held by Pentwater Capital Management, which reported holding $381.4 million worth of stock at the end of June. It was followed by Magnetar Capital with a $174.3 million position. Other investors bullish on the company included Alpine Associates, Balyasny Asset Management, and Water Island Capital. In terms of the portfolio weights assigned to each position Sand Grove Capital Partners allocated the biggest weight to Coherent, Inc. (NASDAQ:COHR), around 8.09% of its 13F portfolio. Havens Advisors is also relatively very bullish on the stock, dishing out 7.35 percent of its 13F equity portfolio to COHR.

With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Hudson Bay Capital Management, managed by Sander Gerber, created the most valuable position in Coherent, Inc. (NASDAQ:COHR). Hudson Bay Capital Management had $23.5 million invested in the company at the end of the quarter. Nathaniel August’s Mangrove Partners also initiated a $19.7 million position during the quarter. The other funds with brand new COHR positions are Louis Bacon’s Moore Global Investments, John M. Angelo and Michael L. Gordon’s Angelo Gordon & Co, and Joel Greenblatt’s Gotham Asset Management.

Let’s check out hedge fund activity in other stocks similar to Coherent, Inc. (NASDAQ:COHR). We will take a look at Manpowergroup Inc (NYSE:MAN), MicroStrategy Incorporated (NASDAQ:MSTR), United States Steel Corporation (NYSE:X), C3.ai, Inc. (NYSE:AI), Halozyme Therapeutics, Inc. (NASDAQ:HALO), Stitch Fix, Inc. (NASDAQ:SFIX), and BlackLine, Inc. (NASDAQ:BL). All of these stocks’ market caps are similar to COHR’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.6 hedge funds with bullish positions and the average amount invested in these stocks was $364 million. That figure was $1525 million in COHR’s case. United States Steel Corporation (NYSE:X) is the most popular stock in this table. On the other hand MicroStrategy Incorporated (NASDAQ:MSTR) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Coherent, Inc. (NASDAQ:COHR) is more popular among hedge funds. Our overall hedge fund sentiment score for COHR is 87. 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 gained 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. Unfortunately COHR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on COHR were disappointed as the stock returned -4.2% since the end of the second quarter (through 10/1) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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