It’s a little-known fact that stock performance is not evenly distributed (i.e. you don’t have a 50/50 chance of picking a market-beating stock). In fact, despite the S&P 500 gaining about 5.2% between November 1, 2014 and October 30, 2015, less than 49% of the stocks in the index beat the market during that time. In contrast, the 30 stocks from the index which were the most popular among the investors that we track returned 9.5% during that time and 63% of them beat the market. This shows that while hedge funds get a lot of flak from the mainstream media for their performance, it can be rewarding to follow their moves using the right sets of data. Even then, there is never a fool proof strategy to generating returns, as even the collective wisdom of top hedge funds gets it wrong some times, as in the case of some of their top picks from the index like Micron and Anadarko. The data though, shows that following the collective wisdom of select hedge funds can be a very wise move overall.
AeroVironment, Inc. (NASDAQ:AVAV) was in 9 hedge funds’ portfolios at the end of the third quarter of 2015. AVAV investors should pay attention to a decrease in support from the world’s most elite money managers recently. There were 11 hedge funds in our database with AVAV positions at the end of the previous quarter. At the end of this article we will also compare AVAV to other stocks including Haynes International, Inc. (NASDAQ:HAYN), Invacare Corporation (NYSE:IVC), and INTL Fcstone Inc (NASDAQ:INTL) to get a better sense of its popularity.
Keeping this in mind, we’re going to check out the recent action regarding AeroVironment, Inc. (NASDAQ:AVAV).
What does the smart money think about AeroVironment, Inc. (NASDAQ:AVAV)?
At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -18% from the second quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Headlands Capital, managed by David Park, holds the most valuable position in AeroVironment, Inc. (NASDAQ:AVAV). Headlands Capital has a $10.2 million position in the stock, comprising 10.8% of its 13F portfolio. Coming in second is Renaissance Technologies, led by Jim Simons, holding a $5.2 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors with similar optimism contain Chuck Royce’s Royce & Associates, Brian Ashford-Russell and Tim Woolley’s Polar Capital and Ken Griffin’s Citadel Investment Group.