In this article we will take a look at whether hedge funds think Aegion Corp (NASDAQ:AEGN) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Aegion Corp (NASDAQ:AEGN) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 7 hedge funds’ portfolios at the end of March. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Frequency Therapeutics, Inc. (NASDAQ:FREQ), eXp World Holdings, Inc. (NASDAQ:EXPI), and 111, Inc. (NASDAQ:YI) to gather more data points. Our calculations also showed that AEGN 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.
If you’d ask most shareholders, hedge funds are perceived as worthless, old investment vehicles of the past. While there are more than 8000 funds trading at the moment, Our researchers hone in on the leaders of this group, around 850 funds. These investment experts direct bulk of all hedge funds’ total asset base, and by tracking their best picks, Insider Monkey has figured out many investment strategies that have historically outpaced the market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Peter Rathjens of Arrowstreet Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to view the latest hedge fund action regarding Aegion Corp (NASDAQ:AEGN).
Hedge fund activity in Aegion Corp (NASDAQ:AEGN)
At Q1’s end, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the fourth quarter of 2019. On the other hand, there were a total of 8 hedge funds with a bullish position in AEGN a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies has the largest position in Aegion Corp (NASDAQ:AEGN), worth close to $8.2 million, amounting to less than 0.1%% of its total 13F portfolio. The second largest stake is held by Royce & Associates, managed by Chuck Royce, which holds a $5.7 million position; 0.1% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions include Mario Gabelli’s GAMCO Investors, John Overdeck and David Siegel’s Two Sigma Advisors and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to Aegion Corp (NASDAQ:AEGN), around 0.08% of its 13F portfolio. Bailard Inc is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to AEGN.
Seeing as Aegion Corp (NASDAQ:AEGN) has witnessed a decline in interest from the entirety of the hedge funds we track, logic holds that there is a sect of money managers who were dropping their entire stakes heading into Q4. Intriguingly, Donald Sussman’s Paloma Partners said goodbye to the biggest stake of the “upper crust” of funds tracked by Insider Monkey, valued at an estimated $0.4 million in stock, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital was right behind this move, as the fund dumped about $0 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks similar to Aegion Corp (NASDAQ:AEGN). We will take a look at Frequency Therapeutics, Inc. (NASDAQ:FREQ), eXp World Holdings, Inc. (NASDAQ:EXPI), 111, Inc. (NASDAQ:YI), and Northfield Bancorp, Inc. (Staten Island, NY) (NASDAQ:NFBK). This group of stocks’ market valuations are closest to AEGN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FREQ | 8 | 98307 | -1 |
| EXPI | 6 | 14324 | -1 |
| YI | 3 | 7044 | 1 |
| NFBK | 6 | 28889 | 1 |
| Average | 5.75 | 37141 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.75 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $17 million in AEGN’s case. Frequency Therapeutics, Inc. (NASDAQ:FREQ) is the most popular stock in this table. On the other hand 111, Inc. (NASDAQ:YI) is the least popular one with only 3 bullish hedge fund positions. Aegion Corp (NASDAQ:AEGN) 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 13.9% in 2020 through June 10th but beat the market by 14.2 percentage points. Unfortunately AEGN wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on AEGN were disappointed as the stock returned -10.1% 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.
