We at Insider Monkey have gone over 867 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of IPG Photonics Corporation (NASDAQ:IPGP) based on that data.
Is IPG Photonics Corporation (NASDAQ:IPGP) the right investment to pursue these days? The best stock pickers were turning bullish. The number of long hedge fund positions inched up by 2 recently. IPG Photonics Corporation (NASDAQ:IPGP) was in 25 hedge funds’ portfolios at the end of September. The all time high for this statistic is 31. Our calculations also showed that IPGP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 23 hedge funds in our database with IPGP positions at the end of the second quarter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 review the latest hedge fund action encompassing IPG Photonics Corporation (NASDAQ:IPGP).
Do Hedge Funds Think IPGP Is A Good Stock To Buy Now?
At Q3’s end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from the previous quarter. The graph below displays the number of hedge funds with bullish position in IPGP over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Ian Simm’s Impax Asset Management has the most valuable position in IPG Photonics Corporation (NASDAQ:IPGP), worth close to $143 million, comprising 0.6% of its total 13F portfolio. The second most bullish fund manager is Terry Smith of Fundsmith LLP, with a $126.5 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions comprise Chuck Royce’s Royce & Associates, Ken Fisher’s Fisher Asset Management and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Impax Asset Management allocated the biggest weight to IPG Photonics Corporation (NASDAQ:IPGP), around 0.59% of its 13F portfolio. Motley Fool Asset Management is also relatively very bullish on the stock, earmarking 0.51 percent of its 13F equity portfolio to IPGP.
As industrywide interest jumped, key hedge funds have jumped into IPG Photonics Corporation (NASDAQ:IPGP) headfirst. Renaissance Technologies, established the most valuable position in IPG Photonics Corporation (NASDAQ:IPGP). Renaissance Technologies had $14.5 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $8.9 million position during the quarter. The following funds were also among the new IPGP investors: D. E. Shaw’s D E Shaw, Greg Eisner’s Engineers Gate Manager, and Ran Pang’s Quantamental Technologies.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as IPG Photonics Corporation (NASDAQ:IPGP) but similarly valued. These stocks are DXC Technology Company (NYSE:DXC), Bright Horizons Family Solutions Inc (NYSE:BFAM), Gerdau SA (NYSE:GGB), Aramark (NYSE:ARMK), MKS Instruments, Inc. (NASDAQ:MKSI), SEI Investments Company (NASDAQ:SEIC), and DigitalOcean Holdings, Inc. (NYSE:DOCN). All of these stocks’ market caps resemble IPGP’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.3 hedge funds with bullish positions and the average amount invested in these stocks was $518 million. That figure was $436 million in IPGP’s case. DXC Technology Company (NYSE:DXC) is the most popular stock in this table. On the other hand Gerdau SA (NYSE:GGB) is the least popular one with only 13 bullish hedge fund positions. IPG Photonics Corporation (NASDAQ:IPGP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IPGP is 61.2. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately IPGP wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); IPGP investors were disappointed as the stock returned 7.7% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.