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. We have processed the filings of the more than 817 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Helios Technologies, Inc. (NASDAQ:HLIO) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Helios Technologies (HLIO) a good stock to buy now? HLIO has seen a decrease in activity from the world’s largest hedge funds recently. Helios Technologies, Inc. (NASDAQ:HLIO) was in 8 hedge funds’ portfolios at the end of September. The all time high for this statistics is 11. Our calculations also showed that HLIO 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 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 we’re going to take a glance at the fresh hedge fund action surrounding Helios Technologies, Inc. (NASDAQ:HLIO).
How are hedge funds trading Helios Technologies, Inc. (NASDAQ:HLIO)?
At third quarter’s end, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in HLIO 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.
More specifically, Royce & Associates was the largest shareholder of Helios Technologies, Inc. (NASDAQ:HLIO), with a stake worth $39.3 million reported as of the end of September. Trailing Royce & Associates was ACK Asset Management, which amassed a stake valued at $8.9 million. Marshall Wace LLP, Citadel Investment Group, and Renaissance Technologies 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 ACK Asset Management allocated the biggest weight to Helios Technologies, Inc. (NASDAQ:HLIO), around 4.57% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, dishing out 0.42 percent of its 13F equity portfolio to HLIO.
Seeing as Helios Technologies, Inc. (NASDAQ:HLIO) has witnessed a decline in interest from hedge fund managers, it’s safe to say that there is a sect of hedge funds who were dropping their positions entirely heading into Q4. Interestingly, Dmitry Balyasny’s Balyasny Asset Management dumped the largest investment of the 750 funds tracked by Insider Monkey, worth an estimated $0.7 million in stock, and Greg Eisner’s Engineers Gate Manager was right behind this move, as the fund dumped about $0.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds heading into Q4.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Helios Technologies, Inc. (NASDAQ:HLIO) but similarly valued. We will take a look at Intellia Therapeutics, Inc. (NASDAQ:NTLA), Sixth Street Specialty Lending Inc (NYSE:TSLX), Bitauto Hldg Ltd (NYSE:BITA), Steelcase Inc. (NYSE:SCS), NuStar Energy L.P. (NYSE:NS), ICF International Inc (NASDAQ:ICFI), and EnPro Industries, Inc. (NYSE:NPO). All of these stocks’ market caps match HLIO’s market cap.
|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 14 hedge funds with bullish positions and the average amount invested in these stocks was $82 million. That figure was $55 million in HLIO’s case. Steelcase Inc. (NYSE:SCS) is the most popular stock in this table. On the other hand NuStar Energy L.P. (NYSE:NS) is the least popular one with only 4 bullish hedge fund positions. Helios Technologies, Inc. (NASDAQ:HLIO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HLIO is 36.9. 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 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on HLIO as the stock returned 35.2% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.