Is Astronics Corporation (ATRO) A Good Stock To Buy?

A market correction in the third quarter, spurred by a number of global macroeconomic concerns ended up having a negative impact on the markets and many hedge funds as a result. The stocks of smaller companies were especially hard hit during this time as investors fled to investments seen as being safer. This is evident in the fact that the Russell 2000 ETF underperformed the S&P 500 ETF by 14 percentage points between June 25 and the end of October. We also received indications that hedge funds were trimming their positions amid the market volatility and uncertainty, and given their greater inclination towards smaller cap stocks than other investors, it follows that a stronger sell-off occurred in those stocks. Let’s study the hedge fund sentiment to see how those concerns affected their ownership of Astronics Corporation (NASDAQ:ATRO) during the quarter.

Astronics Corporation (NASDAQ:ATRO) has seen an increase in activity from the world’s largest hedge funds of late. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Advantage Oil & Gas Ltd (USA) (NYSE:AAV), TPG Specialty Lending Inc (NYSE:TSLX), and Continental Building Products Inc (NYSE:CBPX) to gather more data points.

To most stock holders, hedge funds are viewed as underperforming, outdated financial vehicles of the past. While there are more than 8000 funds in operation at present, We choose to focus on the masters of this club, approximately 700 funds. These hedge fund managers manage the lion’s share of the hedge fund industry’s total capital, and by following their top equity investments, Insider Monkey has brought to light a number of investment strategies that have historically surpassed Mr. Market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Now, we’re going to analyze the fresh action surrounding Astronics Corporation (NASDAQ:ATRO).

Hedge fund activity in Astronics Corporation (NASDAQ:ATRO)

At Q3’s end, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 27% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Jim Simons’s Renaissance Technologies has the largest position in Astronics Corporation (NASDAQ:ATRO), worth close to $9.3 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Israel Englander of Millennium Management, with a $5.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers that are bullish comprise Ken Griffin’s Citadel Investment Group, Charles Paquelet’s Skylands Capital and David Costen Haley’s HBK Investments.

As industrywide interest jumped, some big names have been driving this bullishness. Ken Griffin’s Citadel Investment Group made a $3 million investment in the stock during the quarter. The other funds with brand new ATRO positions are Peter Muller’s PDT Partners, Ken Gray and Steve Walsh’s Bryn Mawr Capital, and John Zaro’s Bourgeon Capital.

Let’s now take a look at hedge fund activity in other stocks similar to Astronics Corporation (NASDAQ:ATRO). These stocks are Advantage Oil & Gas Ltd (USA) (NYSE:AAV), TPG Specialty Lending Inc (NYSE:TSLX), Continental Building Products Inc (NYSE:CBPX), and Virtus Investment Partners Inc (NASDAQ:VRTS). This group of stocks’ market values are closest to ATRO’s market value.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $65 million. That figure was $32 million in ATRO’s case. Continental Building Products Inc (NYSE:CBPX) is the most popular stock in this table. On the other hand, Advantage Oil & Gas Ltd (USA) (NYSE:AAV) is the least popular one with only 6 bullish hedge fund positions. Astronics Corporation (NASDAQ:ATRO), with 19 bullish hedge fund positions is not the most popular stock in this group, but it has attracted attention from investors above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are collectively most bullish on. In this regard, CBPX might be a better alternative.