Is Veoneer, Inc. (NASDAQ:VNE) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is VNE a good stock to buy now? Veoneer, Inc. (NASDAQ:VNE) investors should be aware of a decrease in activity from the world’s largest hedge funds of late. Veoneer, Inc. (NASDAQ:VNE) was in 10 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 14. Our calculations also showed that VNE 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.
If you’d ask most stock holders, hedge funds are assumed to be worthless, old financial vehicles of years past. While there are more than 8000 funds with their doors open at present, Our experts choose to focus on the aristocrats of this club, about 850 funds. It is estimated that this group of investors preside over bulk of the hedge fund industry’s total asset base, and by tailing their best investments, Insider Monkey has identified a number of investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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 analyze the fresh hedge fund action surrounding Veoneer, Inc. (NASDAQ:VNE).
Do Hedge Funds Think VNE Is A Good Stock To Buy Now?
At third quarter’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from the second quarter of 2020. By comparison, 11 hedge funds held shares or bullish call options in VNE a year ago. So, let’s review 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, Christer Gardell and Lars Forberg’s Cevian Capital has the number one position in Veoneer, Inc. (NASDAQ:VNE), worth close to $117.9 million, accounting for 21.5% of its total 13F portfolio. Sitting at the No. 2 spot is D. E. Shaw of D E Shaw, with a $3.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining professional money managers with similar optimism include Ken Griffin’s Citadel Investment Group, Kenneth Squire’s 13D Management and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors. In terms of the portfolio weights assigned to each position Cevian Capital allocated the biggest weight to Veoneer, Inc. (NASDAQ:VNE), around 21.5% of its 13F portfolio. 13D Management is also relatively very bullish on the stock, setting aside 0.47 percent of its 13F equity portfolio to VNE.
Since Veoneer, Inc. (NASDAQ:VNE) has experienced declining sentiment from hedge fund managers, it’s safe to say that there exists a select few money managers who were dropping their full holdings in the third quarter. Intriguingly, Paul Marshall and Ian Wace’s Marshall Wace LLP sold off the biggest position of the “upper crust” of funds monitored by Insider Monkey, valued at about $1.6 million in stock. Greg Eisner’s fund, Engineers Gate Manager, also sold off its stock, about $0.7 million worth. These transactions are important to note, as total hedge fund interest was cut by 4 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Veoneer, Inc. (NASDAQ:VNE) but similarly valued. These stocks are Pebblebrook Hotel Trust (NYSE:PEB), Mueller Water Products, Inc. (NYSE:MWA), Navient Corp (NASDAQ:NAVI), Uniqure NV (NASDAQ:QURE), Amarin Corporation plc (NASDAQ:AMRN), Adient plc (NYSE:ADNT), and Celsius Holdings, Inc. (NASDAQ:CELH). All of these stocks’ market caps match VNE’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 25.3 hedge funds with bullish positions and the average amount invested in these stocks was $243 million. That figure was $129 million in VNE’s case. Adient plc (NYSE:ADNT) is the most popular stock in this table. On the other hand Pebblebrook Hotel Trust (NYSE:PEB) is the least popular one with only 9 bullish hedge fund positions. Veoneer, Inc. (NASDAQ:VNE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for VNE is 24.1. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on VNE as the stock returned 53.3% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.