Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Amphenol Corporation (NYSE:APH).
Is APH a good stock to buy now? Amphenol Corporation (NYSE:APH) has seen an increase in hedge fund sentiment in recent months. Amphenol Corporation (NYSE:APH) was in 49 hedge funds’ portfolios at the end of September. The all time high for this statistic is 42. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 42 hedge funds in our database with APH positions at the end of the second quarter. Our calculations also showed that APH isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this cannabis tech stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 website. Now let’s take a gander at the recent hedge fund action encompassing Amphenol Corporation (NYSE:APH).
Do Hedge Funds Think APH Is A Good Stock To Buy Now?
At the end of September, a total of 49 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from one quarter earlier. By comparison, 33 hedge funds held shares or bullish call options in APH a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Select Equity Group was the largest shareholder of Amphenol Corporation (NYSE:APH), with a stake worth $539.2 million reported as of the end of September. Trailing Select Equity Group was Suvretta Capital Management, which amassed a stake valued at $99.8 million. Adage Capital Management, Arrowstreet Capital, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Ayrshire Capital Management allocated the biggest weight to Amphenol Corporation (NYSE:APH), around 3.31% of its 13F portfolio. Thames Capital Management is also relatively very bullish on the stock, setting aside 2.78 percent of its 13F equity portfolio to APH.
Now, some big names have jumped into Amphenol Corporation (NYSE:APH) headfirst. Shellback Capital, managed by Doug Gordon, Jon Hilsabeck and Don Jabro, initiated the biggest position in Amphenol Corporation (NYSE:APH). Shellback Capital had $16.7 million invested in the company at the end of the quarter. Joe DiMenna’s ZWEIG DIMENNA PARTNERS also initiated a $7.1 million position during the quarter. The other funds with brand new APH positions are Dmitry Balyasny’s Balyasny Asset Management, Alexander Mitchell’s Scopus Asset Management, and Zach Schreiber’s Point State Capital.
Let’s check out hedge fund activity in other stocks similar to Amphenol Corporation (NYSE:APH). We will take a look at TE Connectivity Ltd. (NYSE:TEL), SYSCO Corporation (NYSE:SYY), Cummins Inc. (NYSE:CMI), IHS Markit Ltd. (NYSE:INFO), Walgreens Boots Alliance Inc (NASDAQ:WBA), Agilent Technologies Inc. (NYSE:A), and Datadog, Inc. (NASDAQ:DDOG). This group of stocks’ market values match APH’s market value.
|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 39 hedge funds with bullish positions and the average amount invested in these stocks was $1754 million. That figure was $1163 million in APH’s case. Cummins Inc. (NYSE:CMI) is the most popular stock in this table. On the other hand TE Connectivity Ltd. (NYSE:TEL) is the least popular one with only 33 bullish hedge fund positions. Amphenol Corporation (NYSE:APH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for APH is 90. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on APH as the stock returned 23.1% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.