Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Axcelis Technologies Inc (NASDAQ:ACLS) shareholders have witnessed a decrease in enthusiasm from smart money in recent months. There were 12 hedge funds in our database with ACLS positions at the end of the second quarter, which had fallen to 10 by the end of the third quarter. At the end of this article we will also compare ACLS to other stocks including Fly Leasing Ltd(ADR) (NYSE:FLY), Audentes Therapeutics Inc (NASDAQ:BOLD), and Beazer Homes USA, Inc. (NYSE:BZH) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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How are hedge funds trading Axcelis Technologies Inc (NASDAQ:ACLS)?
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a 17% drop from the previous quarter, and the fourth-straight quarter in which hedge fund ownership of ACLS has fallen. Below, you can check out the change in hedge fund sentiment towards ACLS over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Richard Mashaal’s RIMA Senvest Management has the most valuable position in Axcelis Technologies Inc (NASDAQ:ACLS), worth close to $37.2 million, accounting for 2.7% of its total 13F portfolio. The second largest stake is held by Ken Grossman and Glen Schneider of SG Capital Management, which has an $11.5 million position; 3.3% of its 13F portfolio is allocated to the company. Some other peers that hold long positions consist of Chuck Royce’s Royce & Associates, D E Shaw, one of the biggest hedge funds in the world, and Jim Simons’ Renaissance Technologies. We should note that SG Capital Management is among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-micro-cap stocks.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Axcelis Technologies Inc (NASDAQ:ACLS) but similarly valued. These stocks are Fly Leasing Ltd(ADR) (NYSE:FLY), Audentes Therapeutics Inc (NASDAQ:BOLD), Beazer Homes USA, Inc. (NYSE:BZH), and Baldwin & Lyons Inc (NASDAQ:BWINB). This group of stocks’ market caps are closest to ACLS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FLY | 8 | 41338 | -1 |
| BOLD | 13 | 166773 | 13 |
| BZH | 15 | 87093 | 4 |
| BWINB | 7 | 61724 | 1 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $89 million. That figure was $58 million in ACLS’s case. Beazer Homes USA, Inc. (NYSE:BZH) is the most popular stock in this table. On the other hand Baldwin & Lyons Inc (NASDAQ:BWINB) is the least popular one with only 7 bullish hedge fund positions. Axcelis Technologies Inc (NASDAQ:ACLS) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard BZH might be a better candidate to consider taking a long position in.
Disclosure: None
