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 Atlantica Sustainable Infrastructure plc (NASDAQ:AY).
Atlantica Sustainable Infrastructure plc (NASDAQ:AY) was in 11 hedge funds’ portfolios at the end of September. The all time high for this statistics is 22. AY investors should be aware of a decrease in activity from the world’s largest hedge funds of late. There were 12 hedge funds in our database with AY positions at the end of the second quarter. Our calculations also showed that AY 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. With all of this in mind we’re going to take a gander at the new hedge fund action regarding Atlantica Sustainable Infrastructure plc (NASDAQ:AY).
Do Hedge Funds Think AY Is A Good Stock To Buy Now?
At third quarter’s end, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from the previous quarter. On the other hand, there were a total of 19 hedge funds with a bullish position in AY a year ago. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, GLG Partners, managed by Noam Gottesman, holds the number one position in Atlantica Sustainable Infrastructure plc (NASDAQ:AY). GLG Partners has a $21.4 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, which holds a $19.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions consist of Louis Bacon’s Moore Global Investments, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Bernard Lambilliotte’s Ecofin Ltd. In terms of the portfolio weights assigned to each position Ecofin Ltd allocated the biggest weight to Atlantica Sustainable Infrastructure plc (NASDAQ:AY), around 2.01% of its 13F portfolio. Moore Global Investments is also relatively very bullish on the stock, setting aside 0.12 percent of its 13F equity portfolio to AY.
Seeing as Atlantica Sustainable Infrastructure plc (NASDAQ:AY) has faced falling interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of money managers that elected to cut their entire stakes heading into Q4. It’s worth mentioning that Bruce Kovner’s Caxton Associates LP sold off the biggest investment of all the hedgies followed by Insider Monkey, comprising an estimated $6 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund cut about $1.9 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 1 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks similar to Atlantica Sustainable Infrastructure plc (NASDAQ:AY). These stocks are Werner Enterprises, Inc. (NASDAQ:WERN), Lexington Realty Trust (NYSE:LXP), Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), Youdao, Inc. (NYSE:DAO), Crocs, Inc. (NASDAQ:CROX), Immunovant, Inc. (NASDAQ:IMVT), and BMC Stock Holdings, Inc. (NASDAQ:BMCH). All of these stocks’ market caps match AY’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 26.3 hedge funds with bullish positions and the average amount invested in these stocks was $442 million. That figure was $63 million in AY’s case. Crocs, Inc. (NASDAQ:CROX) is the most popular stock in this table. On the other hand Youdao, Inc. (NYSE:DAO) is the least popular one with only 10 bullish hedge fund positions. Atlantica Sustainable Infrastructure plc (NASDAQ:AY) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AY is 21. 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 AY as the stock returned 22.9% 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.