As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds' thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about ANSYS, Inc. (NASDAQ:ANSS).
Is ANSYS, Inc. (NASDAQ:ANSS) a buy, sell, or hold? Money managers were taking a pessimistic view. The number of bullish hedge fund positions decreased by 8 lately. ANSYS, Inc. (NASDAQ:ANSS) was in 38 hedge funds' portfolios at the end of September. The all time high for this statistic is 46. Our calculations also showed that ANSS isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we're going to view the key hedge fund action encompassing ANSYS, Inc. (NASDAQ:ANSS).
Charles Akre of Akre Capital Management
Do Hedge Funds Think ANSS Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from one quarter earlier. On the other hand, there were a total of 40 hedge funds with a bullish position in ANSS a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Ian Simm's Impax Asset Management has the most valuable position in ANSYS, Inc. (NASDAQ:ANSS), worth close to $262.4 million, comprising 1.1% of its total 13F portfolio. On Impax Asset Management's heels is Akre Capital Management, managed by Charles Akre, which holds a $207.6 million position; 1.3% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions encompass Greg Poole's Echo Street Capital Management, Terry Smith's Fundsmith LLP and Barry Dargan's Intermede Investment Partners. In terms of the portfolio weights assigned to each position Crestwood Capital Management allocated the biggest weight to ANSYS, Inc. (NASDAQ:ANSS), around 5.23% of its 13F portfolio. Montanaro Asset Management is also relatively very bullish on the stock, designating 4.16 percent of its 13F equity portfolio to ANSS.
Seeing as ANSYS, Inc. (NASDAQ:ANSS) has witnessed a decline in interest from hedge fund managers, logic holds that there was a specific group of hedge funds that slashed their full holdings last quarter. At the top of the heap, Dmitry Balyasny's Balyasny Asset Management said goodbye to the biggest position of all the hedgies monitored by Insider Monkey, comprising close to $18 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital was right behind this move, as the fund dumped about $13.8 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 8 funds last quarter.
Let's check out hedge fund activity in other stocks similar to ANSYS, Inc. (NASDAQ:ANSS). These stocks are Fastenal Company (NASDAQ:FAST), ArcelorMittal (NYSE:MT), Ecopetrol S.A. (NYSE:EC), Ball Corporation (NYSE:BLL), Lennar Corporation (NYSE:LEN), Fifth Third Bancorp (NASDAQ:FITB), and Alexandria Real Estate Equities Inc (NYSE:ARE). All of these stocks' market caps are similar to ANSS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FAST,30,609114,5 MT,20,1012692,-2 EC,6,64885,0 BLL,27,1457074,-17 LEN,50,1706131,0 FITB,28,283754,-13 ARE,26,489883,-2 Average,26.7,803362,-4.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.7 hedge funds with bullish positions and the average amount invested in these stocks was $803 million. That figure was $1493 million in ANSS's case. Lennar Corporation (NYSE:LEN) is the most popular stock in this table. On the other hand Ecopetrol S.A. (NYSE:EC) is the least popular one with only 6 bullish hedge fund positions. ANSYS, Inc. (NASDAQ:ANSS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ANSS is 58.1. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on ANSS as the stock returned 15% since the end of Q3 (through 11/30) 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.