Is WPRT A Good Stock To Buy Now?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Westport Fuel Systems Inc. (NASDAQ:WPRT).

Is WPRT a good stock to buy now? Westport Fuel Systems Inc. (NASDAQ:WPRT) shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately. Westport Fuel Systems Inc. (NASDAQ:WPRT) was in 8 hedge funds’ portfolios at the end of September. The all time high for this statistics is 13. There were 10 hedge funds in our database with WPRT positions at the end of the second quarter. Our calculations also showed that WPRT 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 today’s marketplace there are a large number of gauges stock traders put to use to analyze publicly traded companies. Some of the best gauges are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the top hedge fund managers can outperform their index-focused peers by a significant amount (see the details here).

Sander Gerber of Hudson Bay Capital

Sander Gerber of Hudson Bay Capital

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 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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. With all of this in mind we’re going to review the recent hedge fund action regarding Westport Fuel Systems Inc. (NASDAQ:WPRT).

What does smart money think about Westport Fuel Systems Inc. (NASDAQ:WPRT)?

At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards WPRT over the last 21 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

Among these funds, Royce & Associates held the most valuable stake in Westport Fuel Systems Inc. (NASDAQ:WPRT), which was worth $10.2 million at the end of the third quarter. On the second spot was Hudson Bay Capital Management which amassed $1 million worth of shares. Manatuck Hill Partners, Renaissance Technologies, and Trellus Management Company 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 Trellus Management Company allocated the biggest weight to Westport Fuel Systems Inc. (NASDAQ:WPRT), around 0.61% of its 13F portfolio. Manatuck Hill Partners is also relatively very bullish on the stock, dishing out 0.46 percent of its 13F equity portfolio to WPRT.

Because Westport Fuel Systems Inc. (NASDAQ:WPRT) has faced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of funds that decided to sell off their full holdings heading into Q4. It’s worth mentioning that Israel Englander’s Millennium Management sold off the biggest stake of the “upper crust” of funds followed by Insider Monkey, valued at about $0.6 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also dumped its stock, about $0.3 million worth. These transactions are interesting, as total hedge fund interest fell by 2 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Westport Fuel Systems Inc. (NASDAQ:WPRT) but similarly valued. These stocks are Macatawa Bank Corporation (NASDAQ:MCBC), Park Aerospace Corp. (NYSE:PKE), Entercom Communications Corp. (NYSE:ETM), Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC), EMX Royalty Corporation (NYSE:EMX), Old Second Bancorp Inc. (NASDAQ:OSBC), and U.S. Silica Holdings Inc (NYSE:SLCA). This group of stocks’ market values are similar to WPRT’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MCBC 9 16527 0
PKE 12 37961 2
ETM 17 13721 -1
NGVC 13 24830 1
EMX 3 9203 1
OSBC 10 12116 -2
SLCA 16 57788 0
Average 11.4 24592 0.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.4 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $14 million in WPRT’s case. Entercom Communications Corp. (NYSE:ETM) is the most popular stock in this table. On the other hand EMX Royalty Corporation (NYSE:EMX) is the least popular one with only 3 bullish hedge fund positions. Westport Fuel Systems Inc. (NASDAQ:WPRT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WPRT is 39.3. 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 WPRT as the stock returned 144.2% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.

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