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Hedge Funds Have Never Been This Bullish On Winnebago Industries, Inc. (WGO)

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 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, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Winnebago Industries, Inc. (NYSE:WGO) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.

Is Winnebago Industries, Inc. (NYSE:WGO) a buy here? The best stock pickers were becoming hopeful. The number of bullish hedge fund positions increased by 14 recently. Winnebago Industries, Inc. (NYSE:WGO) was in 33 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 23. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that WGO isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 19 hedge funds in our database with WGO positions at the end of the first quarter.

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

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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

CAPITAL GROWTH MANAGEMENT

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. Cannabis stocks are roaring back in 2020, which is why we are also checking out this under-the-radar stock. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s take a gander at the latest hedge fund action regarding Winnebago Industries, Inc. (NYSE:WGO).

How are hedge funds trading Winnebago Industries, Inc. (NYSE:WGO)?

At the end of June, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 74% from the first quarter of 2020. On the other hand, there were a total of 13 hedge funds with a bullish position in WGO a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

Is WGO A Good Stock To Buy?

Among these funds, Fisher Asset Management held the most valuable stake in Winnebago Industries, Inc. (NYSE:WGO), which was worth $70.3 million at the end of the third quarter. On the second spot was Punch Card Capital which amassed $68.1 million worth of shares. Marshall Wace LLP, Royce & Associates, and Capital Growth Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Punch Card Capital allocated the biggest weight to Winnebago Industries, Inc. (NYSE:WGO), around 30.06% of its 13F portfolio. Capital Growth Management is also relatively very bullish on the stock, setting aside 3.06 percent of its 13F equity portfolio to WGO.

As industrywide interest jumped, key money managers were leading the bulls’ herd. Fisher Asset Management, managed by Ken Fisher, created the most outsized position in Winnebago Industries, Inc. (NYSE:WGO). Fisher Asset Management had $70.3 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $43.1 million position during the quarter. The other funds with brand new WGO positions are Ken Heebner’s Capital Growth Management, Steve Cohen’s Point72 Asset Management, and Brad Farber’s Atika Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Winnebago Industries, Inc. (NYSE:WGO) but similarly valued. These stocks are Harmony Gold Mining Co. (NYSE:HMY), First Hawaiian, Inc. (NASDAQ:FHB), CNO Financial Group Inc (NYSE:CNO), Acadia Healthcare Company Inc (NASDAQ:ACHC), FormFactor, Inc. (NASDAQ:FORM), IGM Biosciences, Inc. (NASDAQ:IGMS), and Bottomline Technologies (NASDAQ:EPAY). All of these stocks’ market caps resemble WGO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HMY 10 85944 1
FHB 21 147277 0
CNO 18 287275 3
ACHC 23 381810 -1
FORM 23 113808 1
IGMS 16 679671 2
EPAY 18 116704 0
Average 18.4 258927 0.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.4 hedge funds with bullish positions and the average amount invested in these stocks was $259 million. That figure was $366 million in WGO’s case. Acadia Healthcare Company Inc (NASDAQ:ACHC) is the most popular stock in this table. On the other hand Harmony Gold Mining Co. (NYSE:HMY) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Winnebago Industries, Inc. (NYSE:WGO) is more popular among hedge funds. Our overall hedge fund sentiment score for WGO is 90. 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 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 33% in 2020 through the end of August and still beat the market by 23.2 percentage points. Unfortunately WGO wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on WGO were disappointed as the stock returned -19% since the end of the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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