In this article we will analyze whether Vishay Precision Group Inc (NYSE:VPG) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is VPG a good stock to buy now? Vishay Precision Group Inc (NYSE:VPG) has experienced a decrease in activity from the world’s largest hedge funds lately. Vishay Precision Group Inc (NYSE:VPG) was in 15 hedge funds’ portfolios at the end of September. The all time high for this statistic is 17. There were 17 hedge funds in our database with VPG positions at the end of the second quarter. Our calculations also showed that VPG 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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 look at the fresh hedge fund action regarding Vishay Precision Group Inc (NYSE:VPG).
Do Hedge Funds Think VPG Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in VPG a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
The largest stake in Vishay Precision Group Inc (NYSE:VPG) was held by Nokomis Capital, which reported holding $25.9 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $22.4 million position. Other investors bullish on the company included Royce & Associates, Divisar Capital, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Nokomis Capital allocated the biggest weight to Vishay Precision Group Inc (NYSE:VPG), around 12.01% of its 13F portfolio. Harvey Partners is also relatively very bullish on the stock, dishing out 4.87 percent of its 13F equity portfolio to VPG.
Since Vishay Precision Group Inc (NYSE:VPG) has witnessed bearish sentiment from the smart money, it’s easy to see that there is a sect of funds who were dropping their full holdings by the end of the third quarter. It’s worth mentioning that Greg Eisner’s Engineers Gate Manager dropped the biggest investment of all the hedgies followed by Insider Monkey, valued at close to $0.7 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund cut about $0.4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Vishay Precision Group Inc (NYSE:VPG). We will take a look at Wanda Sports Group Company Limited (NASDAQ:WSG), DURECT Corporation (NASDAQ:DRRX), AGM Group Holdings Inc. (NASDAQ:AGMH), RISE Education Cayman Ltd (NASDAQ:REDU), Profound Medical Corp. (NASDAQ:PROF), Carrols Restaurant Group, Inc. (NASDAQ:TAST), and Ethan Allen Interiors Inc. (NYSE:ETH). This group of stocks’ market caps are similar to VPG’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 8.1 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $92 million in VPG’s case. Ethan Allen Interiors Inc. (NYSE:ETH) is the most popular stock in this table. On the other hand AGM Group Holdings Inc. (NASDAQ:AGMH) is the least popular one with only 1 bullish hedge fund positions. Vishay Precision Group Inc (NYSE:VPG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VPG is 79.5. 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 VPG as the stock returned 18.3% 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.