Insider Monkey finished processing more than 700 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2018. In this article we are going to take a look at smart money sentiment towards Atlantica Yield plc (NASDAQ:AY).
Is Atlantica Yield plc (NASDAQ:AY) a sound stock to buy now? Hedge funds are becoming more confident. The number of bullish hedge fund positions went up by 2 lately. Our calculations also showed that ay isn’t among the 30 most popular stocks among hedge funds. AY was in 22 hedge funds’ portfolios at the end of December. There were 20 hedge funds in our database with AY positions at the end of the previous quarter.
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 has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a gander at the key hedge fund action surrounding Atlantica Yield plc (NASDAQ:AY).
How have hedgies been trading Atlantica Yield plc (NASDAQ:AY)?
At the end of the fourth quarter, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from one quarter earlier. On the other hand, there were a total of 19 hedge funds with a bullish position in AY a year ago. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
Among these funds, Appaloosa Management LP held the most valuable stake in Atlantica Yield plc (NASDAQ:AY), which was worth $58.8 million at the end of the third quarter. On the second spot was Centerbridge Partners which amassed $52.7 million worth of shares. Moreover, Melqart Asset Management, Glendon Capital Management, and Ardsley Partners were also bullish on Atlantica Yield plc (NASDAQ:AY), allocating a large percentage of their portfolios to this stock.
Consequently, specific money managers have jumped into Atlantica Yield plc (NASDAQ:AY) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the biggest position in Atlantica Yield plc (NASDAQ:AY). Arrowstreet Capital had $13.8 million invested in the company at the end of the quarter. Brian Olson, Baehyun Sung, and Jamie Waters’s Blackstart Capital also made a $11 million investment in the stock during the quarter. The other funds with new positions in the stock are Phill Gross and Robert Atchinson’s Adage Capital Management, Lee Ainslie’s Maverick Capital, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Atlantica Yield plc (NASDAQ:AY) but similarly valued. We will take a look at Denali Therapeutics Inc. (NASDAQ:DNLI), Sotheby’s (NYSE:BID), Jagged Peak Energy Inc. (NYSE:JAG), and Lexington Realty Trust (NYSE:LXP). This group of stocks’ market valuations resemble AY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DNLI | 5 | 11098 | 1 |
| BID | 16 | 359130 | -9 |
| JAG | 10 | 84418 | -5 |
| LXP | 16 | 41352 | 3 |
| Average | 11.75 | 124000 | -2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $124 million. That figure was $325 million in AY’s case. Sotheby’s (NYSE:BID) is the most popular stock in this table. On the other hand Denali Therapeutics Inc. (NASDAQ:DNLI) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Atlantica Yield plc (NASDAQ:AY) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately AY wasn’t nearly as popular as these 15 stock and hedge funds that were betting on AY were disappointed as the stock returned 4.5% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
