Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about AgEagle Aerial Systems, Inc. (NYSE:UAVS) in this article.
Is UAVS a good stock to buy? AgEagle Aerial Systems, Inc. (NYSE:UAVS) has seen an increase in hedge fund sentiment recently. AgEagle Aerial Systems, Inc. (NYSE:UAVS) was in 5 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 2 hedge funds in our database with UAVS positions at the end of the fourth quarter. Our calculations also showed that UAVS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Matthew Hulsizer of PEAK6 Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a look at the key hedge fund action surrounding AgEagle Aerial Systems, Inc. (NYSE:UAVS).
Do Hedge Funds Think UAVS Is A Good Stock To Buy Now?
At Q1’s end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 150% from the fourth quarter of 2020. By comparison, 1 hedge funds held shares or bullish call options in UAVS a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in AgEagle Aerial Systems, Inc. (NYSE:UAVS) was held by Citadel Investment Group, which reported holding $1.2 million worth of stock at the end of December. It was followed by ExodusPoint Capital with a $0.8 million position. Other investors bullish on the company included Millennium Management, PEAK6 Capital Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position ExodusPoint Capital allocated the biggest weight to AgEagle Aerial Systems, Inc. (NYSE:UAVS), around 0.01% of its 13F portfolio. LMR Partners is also relatively very bullish on the stock, designating 0.0047 percent of its 13F equity portfolio to UAVS.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, established the biggest call position in AgEagle Aerial Systems, Inc. (NYSE:UAVS). Citadel Investment Group had $1.2 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $0.4 million position during the quarter. The other funds with brand new UAVS positions are Ken Griffin’s Citadel Investment Group, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Donald Sussman’s Paloma Partners.
Let’s now take a look at hedge fund activity in other stocks similar to AgEagle Aerial Systems, Inc. (NYSE:UAVS). We will take a look at Donegal Group Inc (NASDAQ:DGICA), Seelos Therapeutics, Inc. (NASDAQ:SEEL), PAVmed Inc. (NASDAQ:PAVM), Southern First Bancshares, Inc. (NASDAQ:SFST), Mereo BioPharma Group plc (NASDAQ:MREO), Transcat, Inc. (NASDAQ:TRNS), and Intelligent Systems Corporation (NYSE:INS). This group of stocks’ market caps resemble UAVS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DGICA | 9 | 15299 | 0 |
| SEEL | 11 | 47180 | 7 |
| PAVM | 10 | 8489 | 4 |
| SFST | 6 | 14458 | 0 |
| MREO | 23 | 195835 | 6 |
| TRNS | 7 | 40885 | 1 |
| INS | 7 | 46814 | -1 |
| Average | 10.4 | 52709 | 2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.4 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $2 million in UAVS’s case. Mereo BioPharma Group plc (NASDAQ:MREO) is the most popular stock in this table. On the other hand Southern First Bancshares, Inc. (NASDAQ:SFST) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks AgEagle Aerial Systems, Inc. (NYSE:UAVS) is even less popular than SFST. Our overall hedge fund sentiment score for UAVS is 38. 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. Hedge funds dodged a bullet by taking a bearish stance towards UAVS. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th but managed to beat the market again by 6.1 percentage points. Unfortunately UAVS wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); UAVS investors were disappointed as the stock returned -23.2% since the end of the first quarter (through 6/18) 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 since 2019.
Disclosure: None. This article was originally published at Insider Monkey.
