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Is Helios Technologies, Inc. (HLIO) A Good Stock To Buy?

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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Helios Technologies, Inc. (NASDAQ:HLIO).

Is Helios Technologies, Inc. (NASDAQ:HLIO) a buy, sell, or hold? Investors who are in the know are becoming less confident. The number of bullish hedge fund positions went down by 2 recently. Our calculations also showed that HLIO isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 21st century investor’s toolkit there are a lot of indicators stock traders use to assess their holdings. Some of the most underrated indicators are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can beat the S&P 500 by a healthy margin (see the details here).

RENAISSANCE TECHNOLOGIES

Jim Simons Founder of Renaissance Technologies

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a look at the new hedge fund action surrounding Helios Technologies, Inc. (NASDAQ:HLIO).

What have hedge funds been doing with Helios Technologies, Inc. (NASDAQ:HLIO)?

At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -33% from one quarter earlier. On the other hand, there were a total of 6 hedge funds with a bullish position in HLIO a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Helios Technologies, Inc. (NASDAQ:HLIO). Royce & Associates has a $50.4 million position in the stock, comprising 0.7% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, which holds a $2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish comprise Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw and . In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to Helios Technologies, Inc. (NASDAQ:HLIO), around 0.69% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0019 percent of its 13F equity portfolio to HLIO.

Judging by the fact that Helios Technologies, Inc. (NASDAQ:HLIO) has faced falling interest from the entirety of the hedge funds we track, logic holds that there exists a select few hedgies that slashed their positions entirely by the end of the third quarter. It’s worth mentioning that Israel Englander’s Millennium Management sold off the biggest position of the 750 funds tracked by Insider Monkey, comprising close to $0.4 million in stock. Donald Sussman’s fund, Paloma Partners, also dropped its stock, about $0.3 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 2 funds by the end of the third quarter.

Let’s now review 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 State Auto Financial Corporation (NASDAQ:STFC), Nu Skin Enterprises, Inc. (NYSE:NUS), SPX FLOW, Inc. (NYSE:FLOW), and Sunrun Inc (NASDAQ:RUN). 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
STFC 6 8352 1
NUS 18 111349 -4
FLOW 15 117620 -1
RUN 24 367076 1
Average 15.75 151099 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $151 million. That figure was $53 million in HLIO’s case. Sunrun Inc (NASDAQ:RUN) is the most popular stock in this table. On the other hand State Auto Financial Corporation (NASDAQ:STFC) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Helios Technologies, Inc. (NASDAQ:HLIO) is even less popular than STFC. Hedge funds dodged a bullet by taking a bearish stance towards HLIO. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but managed to beat the market by 13.2 percentage points. Unfortunately HLIO wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); HLIO investors were disappointed as the stock returned -5.4% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.

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