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Hedge Funds Never Been Less Bullish On AngioDynamics, Inc. (ANGO)

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 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 March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtAngioDynamics, Inc. (NASDAQ:ANGO) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.

AngioDynamics, Inc. (NASDAQ:ANGO) investors should pay attention to a decrease in activity from the world’s largest hedge funds lately. Our calculations also showed that ANGO 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.

AQR CAPITAL MANAGEMENT

Cliff Asness of AQR Capital Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. 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. Keeping this in mind let’s view the latest hedge fund action regarding AngioDynamics, Inc. (NASDAQ:ANGO).

Hedge fund activity in AngioDynamics, Inc. (NASDAQ:ANGO)

At the end of the first quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of -15% from one quarter earlier. By comparison, 13 hedge funds held shares or bullish call options in ANGO a year ago. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

Is ANGO A Good Stock To Buy?

More specifically, Renaissance Technologies was the largest shareholder of AngioDynamics, Inc. (NASDAQ:ANGO), with a stake worth $9.4 million reported as of the end of September. Trailing Renaissance Technologies was Royce & Associates, which amassed a stake valued at $4.1 million. D E Shaw, Two Sigma Advisors, and AQR Capital 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 Factorial Partners allocated the biggest weight to AngioDynamics, Inc. (NASDAQ:ANGO), around 0.79% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, setting aside 0.06 percent of its 13F equity portfolio to ANGO.

Due to the fact that AngioDynamics, Inc. (NASDAQ:ANGO) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of hedgies who were dropping their entire stakes heading into Q4. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest stake of the 750 funds tracked by Insider Monkey, totaling about $0.7 million in stock. Benjamin A. Smith’s fund, Laurion Capital Management, also said goodbye to its stock, about $0.2 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 2 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as AngioDynamics, Inc. (NASDAQ:ANGO) but similarly valued. These stocks are Cellectis SA (NASDAQ:CLLS), Waterstone Financial, Inc. (NASDAQ:WSBF), Alliance Resource Partners, L.P. (NASDAQ:ARLP), and UP Fintech Holding Limited (NASDAQ:TIGR). This group of stocks’ market valuations are similar to ANGO’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CLLS 10 14864 2
WSBF 12 63778 -1
ARLP 4 20224 0
TIGR 2 162 -1
Average 7 24757 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $23 million in ANGO’s case. Waterstone Financial, Inc. (NASDAQ:WSBF) is the most popular stock in this table. On the other hand UP Fintech Holding Limited (NASDAQ:TIGR) is the least popular one with only 2 bullish hedge fund positions. AngioDynamics, Inc. (NASDAQ:ANGO) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 12.3% in 2020 through June 30th but beat the market by 15.5 percentage points. Unfortunately ANGO wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ANGO were disappointed as the stock returned -2.5% during the same time period 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 many of these stocks already outperformed the market so far this year.

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