Many investors, including Paul Tudor Jones or Stan Druckenmiller, have been saying before the Q4 market crash that the stock market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the first quarter, most investors recovered all of their Q4 losses as sentiment shifted and optimism dominated the US China trade negotiations. Nevertheless, many of the stocks that delivered strong returns in the first quarter still sport strong fundamentals and their gains were more related to the general market sentiment rather than their individual performance and hedge funds kept their bullish stance. In this article we will find out how hedge fund sentiment to Apergy Corporation (NYSE:APY) changed recently.
Is Apergy Corporation (NYSE:APY) worth your attention right now? Investors who are in the know are getting less optimistic. The number of bullish hedge fund positions were trimmed by 1 recently. Our calculations also showed that APY isn't among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's check out the key hedge fund action regarding Apergy Corporation (NYSE:APY).
How have hedgies been trading Apergy Corporation (NYSE:APY)?
Heading into the second quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the fourth quarter of 2018. By comparison, 0 hedge funds held shares or bullish call options in APY 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.
According to Insider Monkey's hedge fund database, Steven Richman's East Side Capital (RR Partners) has the biggest position in Apergy Corporation (NYSE:APY), worth close to $87.7 million, corresponding to 10.4% of its total 13F portfolio. Sitting at the No. 2 spot is Encompass Capital Advisors, managed by Todd J. Kantor, which holds a $16.5 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions comprise Ken Griffin's Citadel Investment Group, D. E. Shaw's D E Shaw and Brandon Haley's Holocene Advisors.