Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of VIA optronics AG (NYSE:VIAO).
Is VIA optronics AG (NYSE:VIAO) a buy, sell, or hold? Money managers were in a bullish mood. The number of bullish hedge fund bets inched up by 10 in recent months. VIA optronics AG (NYSE:VIAO) was in 10 hedge funds’ portfolios at the end of September. Our calculations also showed that VIAO 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 more than 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. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
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 peek at the new hedge fund action surrounding VIA optronics AG (NYSE:VIAO).
Do Hedge Funds Think VIAO Is A Good Stock To Buy Now?
At the end of September, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10 from one quarter earlier. By comparison, 0 hedge funds held shares or bullish call options in VIAO a year ago. So, let’s see 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, Jonathan Auerbach’s Hound Partners has the number one position in VIA optronics AG (NYSE:VIAO), worth close to $2.1 million, amounting to 0.1% of its total 13F portfolio. On Hound Partners’s heels is Rubric Capital Management, led by David Rosen, holding a $1.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers that are bullish consist of Kevin Cottrell and Chris LaSusa’s KCL Capital, Steve Cohen’s Point72 Asset Management and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Moon Capital allocated the biggest weight to VIA optronics AG (NYSE:VIAO), around 0.24% of its 13F portfolio. Rubric Capital Management is also relatively very bullish on the stock, dishing out 0.15 percent of its 13F equity portfolio to VIAO.
As industrywide interest jumped, some big names were leading the bulls’ herd. Hound Partners, managed by Jonathan Auerbach, assembled the largest position in VIA optronics AG (NYSE:VIAO). Hound Partners had $2.1 million invested in the company at the end of the quarter. David Rosen’s Rubric Capital Management also made a $1.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Kevin Cottrell and Chris LaSusa’s KCL Capital, Steve Cohen’s Point72 Asset Management, and Israel Englander’s Millennium Management.
Let’s go over hedge fund activity in other stocks similar to VIA optronics AG (NYSE:VIAO). We will take a look at Civista Bancshares, Inc. (NASDAQ:CIVB), Alpha Pro Tech, Ltd. (NYSE:APT), AquaBounty Technologies, Inc. (NASDAQ:AQB), ESSA Pharma Inc. (NASDAQ:EPIX), Verrica Pharmaceuticals Inc. (NASDAQ:VRCA), Soleno Therapeutics, Inc. (NASDAQ:SLNO), and Hovnanian Enterprises, Inc. (NYSE:HOV). This group of stocks’ market caps are closest to VIAO’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 8.9 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $9 million in VIAO’s case. ESSA Pharma Inc. (NASDAQ:EPIX) is the most popular stock in this table. On the other hand AquaBounty Technologies, Inc. (NASDAQ:AQB) is the least popular one with only 4 bullish hedge fund positions. VIA optronics AG (NYSE:VIAO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VIAO is 50. 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. Hedge funds were also right about betting on VIAO as the stock returned 28.4% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.