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Is Apergy Corporation (APY) A Good Stock To Buy?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing more than 750 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2019. What do these smart investors think about Apergy Corporation (NYSE:APY)?

Apergy Corporation (NYSE:APY) has experienced an increase in support from the world’s most elite money managers recently. Our calculations also showed that APY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

To the average investor there are many indicators investors have at their disposal to grade their stock investments. A pair of the most underrated indicators are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the top picks of the best fund managers can outclass the broader indices by a solid margin (see the details here).

David E. Shaw of D.E. Shaw

David E. Shaw of D.E. Shaw

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s check out the new hedge fund action regarding Apergy Corporation (NYSE:APY).

What have hedge funds been doing with Apergy Corporation (NYSE:APY)?

At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from the second quarter of 2019. On the other hand, there were a total of 20 hedge funds with a bullish position in APY a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is APY A Good Stock To Buy?

The largest stake in Apergy Corporation (NYSE:APY) was held by RR Partners, which reported holding $56.8 million worth of stock at the end of September. It was followed by Arosa Capital Management with a $7.9 million position. Other investors bullish on the company included D E Shaw, AQR Capital Management, and SIR Capital Management. In terms of the portfolio weights assigned to each position RR Partners allocated the biggest weight to Apergy Corporation (NYSE:APY), around 6.33% of its 13F portfolio. GeoSphere Capital Management is also relatively very bullish on the stock, earmarking 3.24 percent of its 13F equity portfolio to APY.

Now, some big names have jumped into Apergy Corporation (NYSE:APY) headfirst. SIR Capital Management, managed by Vince Maddi and Shawn Brennan, assembled the most outsized position in Apergy Corporation (NYSE:APY). SIR Capital Management had $3.2 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also made a $0.6 million investment in the stock during the quarter. The other funds with brand new APY positions are Arvind Sanger’s GeoSphere Capital Management, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, and Paul Marshall and Ian Wace’s Marshall Wace.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Apergy Corporation (NYSE:APY) but similarly valued. These stocks are The Geo Group, Inc. (NYSE:GEO), Adtalem Global Education Inc. (NYSE:ATGE), Acceleron Pharma Inc (NASDAQ:XLRN), and Retail Opportunity Investments Corp (NASDAQ:ROIC). All of these stocks’ market caps are similar to APY’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GEO 21 107529 1
ATGE 22 200763 8
XLRN 23 321739 2
ROIC 18 77228 5
Average 21 176815 4

View table here if you experience formatting issues.

As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $177 million. That figure was $88 million in APY’s case. Acceleron Pharma Inc (NASDAQ:XLRN) is the most popular stock in this table. On the other hand Retail Opportunity Investments Corp (NASDAQ:ROIC) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Apergy Corporation (NYSE:APY) is even less popular than ROIC. Hedge funds dodged a bullet by taking a bearish stance towards APY. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately APY wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); APY investors were disappointed as the stock returned -5.6% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.

Disclosure: None. This article was originally published at Insider Monkey.

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