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Hedge Funds Cutting Exposure To ASE Technology Holding Co., Ltd. (ASX)

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded ASE Technology Holding Co., Ltd. (NYSE:ASX) based on those filings.

ASE Technology Holding Co., Ltd. (NYSE:ASX) investors should be aware of a decrease in support from the world’s most elite money managers lately. ASX was in 9 hedge funds’ portfolios at the end of the first quarter of 2020. There were 10 hedge funds in our database with ASX holdings at the end of the previous quarter. Our calculations also showed that ASX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Ken Fisher - FISHER ASSET MANAGEMENT

Ken Fisher of Fisher Asset Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the top 15 defense contractors in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a gander at the latest hedge fund action regarding ASE Technology Holding Co., Ltd. (NYSE:ASX).

How are hedge funds trading ASE Technology Holding Co., Ltd. (NYSE:ASX)?

At Q1’s end, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the fourth quarter of 2019. On the other hand, there were a total of 9 hedge funds with a bullish position in ASX a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is ASX A Good Stock To Buy?

The largest stake in ASE Technology Holding Co., Ltd. (NYSE:ASX) was held by Fisher Asset Management, which reported holding $115.7 million worth of stock at the end of September. It was followed by LMR Partners with a $15.6 million position. Other investors bullish on the company included Renaissance Technologies, Millennium Management, and D E Shaw. In terms of the portfolio weights assigned to each position LMR Partners allocated the biggest weight to ASE Technology Holding Co., Ltd. (NYSE:ASX), around 1.3% of its 13F portfolio. Fisher Asset Management is also relatively very bullish on the stock, setting aside 0.14 percent of its 13F equity portfolio to ASX.

Due to the fact that ASE Technology Holding Co., Ltd. (NYSE:ASX) has faced bearish sentiment from the smart money, it’s safe to say that there is a sect of funds that decided to sell off their full holdings last quarter. It’s worth mentioning that Charles Davidson and Joseph Jacobs’s Wexford Capital cut the largest stake of the “upper crust” of funds followed by Insider Monkey, worth about $0.7 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dropped its stock, about $0.5 million worth. These moves are interesting, as total hedge fund interest was cut by 1 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to ASE Technology Holding Co., Ltd. (NYSE:ASX). These stocks are Alleghany Corporation (NYSE:Y), Pool Corporation (NASDAQ:POOL), Camden Property Trust (NYSE:CPT), and Expedia Group Inc (NASDAQ:EXPE). This group of stocks’ market caps are similar to ASX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
Y 25 268976 1
POOL 33 362202 5
CPT 32 361736 1
EXPE 41 1550595 -18
Average 32.75 635877 -2.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.75 hedge funds with bullish positions and the average amount invested in these stocks was $636 million. That figure was $146 million in ASX’s case. Expedia Group Inc (NASDAQ:EXPE) is the most popular stock in this table. On the other hand Alleghany Corporation (NYSE:Y) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks ASE Technology Holding Co., Ltd. (NYSE:ASX) is even less popular than Y. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but managed to beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on ASX, though not to the same extent, as the stock returned 21.9% during the second quarter (through June 22nd) and outperformed the market as well.

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