Is ATKR A Good Stock To Buy Now?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Atkore International Group Inc. (NYSE:ATKR).

Is ATKR a good stock to buy now? Hedge funds were becoming hopeful. The number of long hedge fund bets went up by 3 in recent months. Atkore International Group Inc. (NYSE:ATKR) was in 17 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 24. Our calculations also showed that ATKR 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.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Gavin Saitowitz of Prelude Capital

Gavin Saitowitz of Prelude Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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 glance at the latest hedge fund action regarding Atkore International Group Inc. (NYSE:ATKR).

Do Hedge Funds Think ATKR Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 21% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ATKR over the last 21 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Atkore International Group Inc. (NYSE:ATKR) was held by Arrowstreet Capital, which reported holding $15.5 million worth of stock at the end of September. It was followed by GLG Partners with a $14.4 million position. Other investors bullish on the company included Millennium Management, Renaissance Technologies, and AQR Capital Management. In terms of the portfolio weights assigned to each position Engineers Gate Manager allocated the biggest weight to Atkore International Group Inc. (NYSE:ATKR), around 0.06% of its 13F portfolio. GLG Partners is also relatively very bullish on the stock, dishing out 0.06 percent of its 13F equity portfolio to ATKR.

As one would reasonably expect, some big names were leading the bulls’ herd. Engineers Gate Manager, managed by Greg Eisner, initiated the most valuable position in Atkore International Group Inc. (NYSE:ATKR). Engineers Gate Manager had $1.4 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also initiated a $0.8 million position during the quarter. The other funds with new positions in the stock are Mika Toikka’s AlphaCrest Capital Management, Peter Muller’s PDT Partners, and Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Atkore International Group Inc. (NYSE:ATKR) but similarly valued. We will take a look at Karyopharm Therapeutics Inc (NASDAQ:KPTI), PC Connection, Inc. (NASDAQ:CNXN), Micro Focus Intl PLC (NYSE:MFGP), Sturm, Ruger & Company, Inc. (NYSE:RGR), Methode Electronics Inc. (NYSE:MEI), The Liberty Braves Group (NASDAQ:BATRA), and Akero Therapeutics, Inc. (NASDAQ:AKRO). This group of stocks’ market values resemble ATKR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
KPTI 21 325726 0
CNXN 4 30286 -4
MFGP 10 18863 -3
RGR 24 181471 -3
MEI 11 68216 -1
BATRA 12 51207 -1
AKRO 14 269570 1
Average 13.7 135048 -1.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.7 hedge funds with bullish positions and the average amount invested in these stocks was $135 million. That figure was $60 million in ATKR’s case. Sturm, Ruger & Company, Inc. (NYSE:RGR) is the most popular stock in this table. On the other hand PC Connection, Inc. (NASDAQ:CNXN) is the least popular one with only 4 bullish hedge fund positions. Atkore International Group Inc. (NYSE:ATKR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ATKR is 61.8. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on ATKR as the stock returned 90.1% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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