Before we spend countless hours researching a company, we like to first analyze what insiders, hedge funds, and billionaire investors think about the stock. This is a necessary first step in our investment process, as our research has shown that the consensus returns from elite investors have been exceptional. In the following paragraphs, we find out what billionaire investors and hedge funds think about Cognex Corporation (NASDAQ:CGNX).
East Cognex Corporation (NASDAQ:CGNX) a wonderful investment now? Fund managers were turning bullish. The number of long positions in hedge funds has increased by 1 in recent months. Cognex Corporation (NASDAQ:CGNX) appeared in 35 hedge fund portfolios at the end of June. The all-time high for this statistic is 34. This means that the bullish number of hedge fund positions in this stock is currently at its all-time high. Our calculations also showed that CGNX is not one of the 30 most popular stocks among hedge funds (click for Q2 ranking).
The reputation of hedge funds as savvy investors has been tarnished over the past decade, as their hedged returns could not keep up with the unhedged returns of stock indices. Hedge funds have over $ 3.5 trillion in assets under management, so you can’t expect all of their portfolios to beat the market with significant margins. Our research identified in advance a select group of hedge funds that have outperformed S&P 500 ETFs by more than 79 percentage points since March 2017 (see details here). So you can still find a lot of gems by following the movements of hedge funds today.
Chuck Royce of Royce & Associates
At Insider Monkey, we scour multiple sources to uncover the next big investing idea. For example, we like undervalued growth stocks that are positive for EBITDA, so we are looking at pitches like this emerging biotechnology stocks. We go through lists like the 10 best EV stocks to choose the next Tesla which will offer a 10x return. Even though we only recommend positions in a tiny fraction of the companies we analyze, we check as many stocks as possible. We read letters from hedge fund investors and listen to equity pitches at hedge fund conferences. You can subscribe to our free daily newsletter at our home page. With that in mind, let’s take a look at the recent hedge fund action regarding Cognex Corporation (NASDAQ:CGNX).
Do hedge funds think CGNX is a good stock to buy now?
At the end of the second quarter, a total of 35 of the hedge funds tracked by Insider Monkey were long in this stock, a change of 3% from the previous quarter. By comparison, 26 hedge funds held bullish stocks or call options in CGNX a year ago. With hedge fund positions experiencing their usual ebb and flow, there is a âtop tierâ of outstanding hedge fund managers who were significantly increasing their stakes (or already accumulating large positions).
Among these funds, Fundsmith LLP held the most valuable stake in Cognex Corporation (NASDAQ: CGNX), which stood at $ 136.2 million at the end of the second quarter. In second place was DE Shaw who raised $ 56.1 million in stock. Royce & Associates, Montanaro Asset Management and Balyasny Asset Management were also very attached to the stock, becoming one of the largest hedge fund holders in the company. In terms of portfolio weights assigned to each position Montanaro asset management assigned the largest weight to Cognex Corporation (NASDAQ: CGNX), around 4.45% of its 13F portfolio. Sandler Capital Management is also relatively very bullish on the stock, designating 1.47% of its 13F equity portfolio to CGNX.
Now, some big names have been behind this optimism. Motley Fool Asset Management, managed by Bryan Hinmon, initiated the largest position in Cognex Corporation (NASDAQ: CGNX). Motley Fool Asset Management had invested $ 6.3 million in the company at the end of the quarter. that of Ray Dalio Bridgewater Associates also initiated a $ 4.9 million position during the quarter. The following funds were also among CGNX’s new investors: Marshall Wace LLP of Paul Marshall and Ian Wace, Centiva Capital of Karim Abbadi and Edward McBride, and Prelude Capital of Gavin Saitowitz and Cisco J. del Valle (formerly Springbok Capital).
Let’s also take a look at hedge fund activity in other stocks – not necessarily in the same industry as Cognex Corporation (NASDAQ: CGNX) but of similar value. These shares are Howmet Aerospace Inc. (NYSE:HWM), Molina Healthcare, Inc. (NYSE:Ministry of Health), Agnico Eagle Mines Limited (NYSE:LAE), GDS Holdings Limited (NASDAQ:GDS), Godaddy Inc (NYSE:GDDY), Citrix Systems, Inc. (NASDAQ:CTXS) and UDR, Inc. (NYSE:UDR). The market capitalizations of this group of shares correspond to the market capitalization of CGNX.
[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of position HF HWM, 47.3892856, -4 MOH, 34,1618744,3 AEM, 29,235678,1 GDS, 38,1648522, – 2 GDDY , 39.2769173.0 CTXS, 23.668537.3 UDR, 24.251040, -6 Medium, 33.4,1583507, -0.7 [/table]
See the table here if you have formatting problems.
As you can see, these stocks had an average of 33.4 hedge funds with bullish positions and the average amount invested in these stocks was $ 1,584 million. That figure was $ 537 million in the case of CGNX. Howmet Aerospace Inc. (NYSE:HWM) is the most popular action in this table. On the other hand, Citrix Systems, Inc. (NASDAQ:CTXS) is the least popular with only 23 bullish hedge fund positions. Cognex Corporation (NASDAQ: CGNX) isn’t the most popular stock in this group, but hedge fund interest is still above average. Our overall hedge fund sentiment score for CGNX is 61. Stocks with a higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal, but we prefer to spend our time researching the stocks on which hedge funds are accumulating. Our calculations have shown 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 21.8% in 2021 through October 11 and again beat the market by 4.4 percentage points. Unfortunately, CGNX was not as popular as these 5 stocks and the hedge funds betting on CGNX were disappointed as the stock returned -5.4% since the end of June (until 10/11) and under -performed the market. If you want to invest in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds, as many of these stocks have already outperformed the market since 2019.
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Disclosure: none. This article originally appeared on Monkey initiate.