Were Hedge Funds Right About Altra Industrial Motion Corp. (AIMC)?
Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Altra Industrial Motion Corp. (NASDAQ:AIMC), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Altra Industrial Motion Corp. (NASDAQ:AIMC) ready to rally soon? Investors who are in the know were buying. The number of bullish hedge fund bets increased by 3 lately. Altra Industrial Motion Corp. (NASDAQ:AIMC) was in 18 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 35. Our calculations also showed that AIMC isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. Keeping this in mind let's take a look at the key hedge fund action regarding Altra Industrial Motion Corp. (NASDAQ:AIMC).
Do Hedge Funds Think AIMC Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AIMC over the last 23 quarters. With hedge funds' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
The largest stake in Altra Industrial Motion Corp. (NASDAQ:AIMC) was held by Arrowstreet Capital, which reported holding $12.9 million worth of stock at the end of December. It was followed by Balyasny Asset Management with a $3.6 million position. Other investors bullish on the company included AQR Capital Management, Millennium Management, and Tudor Investment Corp. In terms of the portfolio weights assigned to each position GRT Capital Partners allocated the biggest weight to Altra Industrial Motion Corp. (NASDAQ:AIMC), around 0.17% of its 13F portfolio. TwinBeech Capital is also relatively very bullish on the stock, designating 0.09 percent of its 13F equity portfolio to AIMC.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the biggest position in Altra Industrial Motion Corp. (NASDAQ:AIMC). Balyasny Asset Management had $3.6 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $2.8 million position during the quarter. The following funds were also among the new AIMC investors: Jinghua Yan's TwinBeech Capital, Mika Toikka's AlphaCrest Capital Management, and Karim Abbadi and Edward McBride's Centiva Capital.
Let's check out hedge fund activity in other stocks similar to Altra Industrial Motion Corp. (NASDAQ:AIMC). We will take a look at First Hawaiian, Inc. (NASDAQ:FHB), Hillenbrand, Inc. (NYSE:HI), LivePerson, Inc. (NASDAQ:LPSN), ChemoCentryx Inc (NASDAQ:CCXI), National Vision Holdings, Inc. (NASDAQ:EYE), Cloudera, Inc. (NYSE:CLDR), and PotlatchDeltic Corporation (NASDAQ:PCH). This group of stocks' market caps are closest to AIMC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FHB,19,174114,5 HI,15,17557,2 LPSN,31,193585,-4 CCXI,20,385704,-3 EYE,24,285800,0 CLDR,30,865678,1 PCH,26,152275,3 Average,23.6,296388,0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.6 hedge funds with bullish positions and the average amount invested in these stocks was $296 million. That figure was $34 million in AIMC's case. LivePerson, Inc. (NASDAQ:LPSN) is the most popular stock in this table. On the other hand Hillenbrand, Inc. (NYSE:HI) is the least popular one with only 15 bullish hedge fund positions. Altra Industrial Motion Corp. (NASDAQ:AIMC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AIMC is 32.8. 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 28.5% in 2021 through July 23rd and beat the market by 10.1 percentage points. A small number of hedge funds were also right about betting on AIMC, though not to the same extent, as the stock returned 12.6% since the end of Q1 (through July 23rd) and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.
