The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 873 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article we look at what those investors think of Hexcel Corporation (NYSE:HXL).
Is Hexcel Corporation (NYSE:HXL) ready to rally soon? Hedge funds were turning bullish. The number of bullish hedge fund bets rose by 4 recently. Hexcel Corporation (NYSE:HXL) was in 22 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 30. Our calculations also showed that HXL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a glance at the fresh hedge fund action encompassing Hexcel Corporation (NYSE:HXL).
Do Hedge Funds Think HXL Is A Good Stock To Buy Now?
At Q2’s end, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards HXL over the last 24 quarters. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
The largest stake in Hexcel Corporation (NYSE:HXL) was held by Millennium Management, which reported holding $41 million worth of stock at the end of June. It was followed by Two Sigma Advisors with a $23.3 million position. Other investors bullish on the company included Royce & Associates, Balyasny Asset Management, and MFP Investors. In terms of the portfolio weights assigned to each position MFP Investors allocated the biggest weight to Hexcel Corporation (NYSE:HXL), around 1.36% of its 13F portfolio. Markel Gayner Asset Management is also relatively very bullish on the stock, designating 0.15 percent of its 13F equity portfolio to HXL.
Now, key hedge funds have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, established the largest position in Hexcel Corporation (NYSE:HXL). Balyasny Asset Management had $18.8 million invested in the company at the end of the quarter. Louis Bacon’s Moore Global Investments also initiated a $5.2 million position during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and D. E. Shaw’s D E Shaw.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Hexcel Corporation (NYSE:HXL) but similarly valued. These stocks are Progyny, Inc. (NASDAQ:PGNY), Rapid7 Inc (NASDAQ:RPD), Leslie’s, Inc. (NASDAQ:LESL), Everbridge, Inc. (NASDAQ:EVBG), The Wendy’s Company (NASDAQ:WEN), Altair Engineering Inc. (NASDAQ:ALTR), and Alliance Data Systems Corporation (NYSE:ADS). This group of stocks’ market values are similar to HXL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PGNY | 39 | 290008 | 13 |
| RPD | 17 | 136746 | -8 |
| LESL | 35 | 427806 | 8 |
| EVBG | 26 | 1200051 | -23 |
| WEN | 30 | 1070385 | 4 |
| ALTR | 18 | 620134 | 0 |
| ADS | 34 | 1338720 | -2 |
| Average | 28.4 | 726264 | -1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.4 hedge funds with bullish positions and the average amount invested in these stocks was $726 million. That figure was $165 million in HXL’s case. Progyny, Inc. (NASDAQ:PGNY) is the most popular stock in this table. On the other hand Rapid7 Inc (NASDAQ:RPD) is the least popular one with only 17 bullish hedge fund positions. Hexcel Corporation (NYSE:HXL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HXL is 42.4. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately HXL wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); HXL investors were disappointed as the stock returned -7.3% since the end of June (through 10/22) 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 in 2021.
Follow Hexcel Corp (NYSE:HXL)
Follow Hexcel Corp (NYSE:HXL)
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Disclosure: None. This article was originally published at Insider Monkey.
