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Were Hedge Funds Right About Flocking Into Avnet, Inc. (AVT)?

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 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31 holdings, data that is available nowhere else. Should you consider Avnet, Inc. (NASDAQ:AVT) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Avnet, Inc. (NASDAQ:AVT) was in 24 hedge funds’ portfolios at the end of the fourth quarter of 2018. AVT has experienced an increase in hedge fund sentiment in recent months. There were 23 hedge funds in our database with AVT positions at the end of the previous quarter. Our calculations also showed that AVT isn’t among the 30 most popular stocks among hedge funds.

Today there are a lot of metrics investors have at their disposal to size up their holdings. A pair of the most innovative metrics are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can outpace the market by a solid amount (see the details here).

Alexander Roepers, Atlantic Investment Management

We’re going to check out the new hedge fund action surrounding Avnet, Inc. (NASDAQ:AVT).

What does the smart money think about Avnet, Inc. (NASDAQ:AVT)?

At the end of the fourth quarter, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AVT over the last 14 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.

AVT_apr2019

The largest stake in Avnet, Inc. (NASDAQ:AVT) was held by Pzena Investment Management, which reported holding $284.2 million worth of stock at the end of September. It was followed by Atlantic Investment Management with a $43.4 million position. Other investors bullish on the company included Millennium Management, AQR Capital Management, and Diamond Hill Capital.

Now, some big names have jumped into Avnet, Inc. (NASDAQ:AVT) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most valuable position in Avnet, Inc. (NASDAQ:AVT). Arrowstreet Capital had $6.5 million invested in the company at the end of the quarter. Michael O’Keefe’s 12th Street Asset Management also initiated a $1.7 million position during the quarter. The other funds with brand new AVT positions are Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Brandon Haley’s Holocene Advisors.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Avnet, Inc. (NASDAQ:AVT) but similarly valued. These stocks are Manpowergroup Inc (NYSE:MAN), Flex Ltd. (NASDAQ:FLEX), Choice Hotels International, Inc. (NYSE:CHH), and Highwoods Properties Inc (NYSE:HIW). This group of stocks’ market caps are closest to AVT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MAN 25 417727 -3
FLEX 24 675508 -2
CHH 19 226548 1
HIW 17 182549 3
Average 21.25 375583 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.25 hedge funds with bullish positions and the average amount invested in these stocks was $376 million. That figure was $582 million in AVT’s case. Manpowergroup Inc (NYSE:MAN) is the most popular stock in this table. On the other hand Highwoods Properties Inc (NYSE:HIW) is the least popular one with only 17 bullish hedge fund positions. Avnet, Inc. (NASDAQ:AVT) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on AVT as the stock returned 28.2% and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.

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

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