Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards ASML Holding N.V. (NASDAQ:ASML) to find out whether there were any major changes in hedge funds’ views.
Is ASML Holding N.V. (NASDAQ:ASML) ready to rally soon? Investors who are in the know were betting on the stock. The number of long hedge fund positions improved by 9 recently. ASML Holding N.V. (NASDAQ:ASML) was in 44 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 35. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ASML isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Daniel Och, Founder of OZ Management
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Do Hedge Funds Think ASML Is A Good Stock To Buy Now?
At Q2’s end, a total of 44 of the hedge funds tracked by Insider Monkey were long this stock, a change of 26% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ASML over the last 24 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Among these funds, Fisher Asset Management held the most valuable stake in ASML Holding N.V. (NASDAQ:ASML), which was worth $2800.2 million at the end of the second quarter. On the second spot was Arrowstreet Capital which amassed $456.3 million worth of shares. Citadel Investment Group, Citadel Investment Group, and D E Shaw 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 Breakline Capital allocated the biggest weight to ASML Holding N.V. (NASDAQ:ASML), around 9.33% of its 13F portfolio. Unio Capital is also relatively very bullish on the stock, dishing out 4.32 percent of its 13F equity portfolio to ASML.
As industrywide interest jumped, specific money managers were breaking ground themselves. OZ Management, managed by Daniel S. Och, initiated the most valuable position in ASML Holding N.V. (NASDAQ:ASML). OZ Management had $124 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also initiated a $54.9 million position during the quarter. The following funds were also among the new ASML investors: Rajiv Jain’s GQG Partners, Michael Rockefeller and KarláKroeker’s Woodline Partners, and Leon Shaulov’s Maplelane Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as ASML Holding N.V. (NASDAQ:ASML) but similarly valued. These stocks are Adobe Inc. (NASDAQ:ADBE), Exxon Mobil Corporation (NYSE:XOM), Comcast Corporation (NASDAQ:CMCSA), Toyota Motor Corporation (NYSE:TM), NIKE, Inc. (NYSE:NKE), Netflix, Inc. (NASDAQ:NFLX), and The Coca-Cola Company (NYSE:KO). This group of stocks’ market caps are closest to ASML’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ADBE | 89 | 13101408 | -18 |
| XOM | 68 | 3698096 | 3 |
| CMCSA | 84 | 9300743 | -4 |
| TM | 12 | 903060 | -6 |
| NKE | 67 | 6425093 | -11 |
| NFLX | 113 | 13216589 | 3 |
| KO | 62 | 24965786 | 1 |
| Average | 70.7 | 10230111 | -4.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 70.7 hedge funds with bullish positions and the average amount invested in these stocks was $10230 million. That figure was $4323 million in ASML’s case. Netflix, Inc. (NASDAQ:NFLX) is the most popular stock in this table. On the other hand Toyota Motor Corporation (NYSE:TM) is the least popular one with only 12 bullish hedge fund positions. ASML Holding N.V. (NASDAQ:ASML) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ASML is 55.8. 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. A small number of hedge funds were also right about betting on ASML as the stock returned 7.4% since the end of the second quarter (through 10/1) and outperformed the market by an even larger margin.
Follow A S M L Holding N V (NASDAQ:ASML)
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Disclosure: None. This article was originally published at Insider Monkey.
