Hedge Funds Are Buying Aspen Technology, Inc. (AZPN)


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 Aspen Technology, Inc. (NASDAQ:AZPN), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Aspen Technology, Inc. (NASDAQ:AZPN) has experienced an increase in support from the world’s most elite money managers in recent months. Aspen Technology, Inc. (NASDAQ:AZPN) was in 32 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 37. Our calculations also showed that AZPN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the eyes of most market participants, hedge funds are assumed to be unimportant, outdated financial tools of the past. While there are over 8000 funds in operation at present, We look at the top tier of this club, approximately 850 funds. These hedge fund managers oversee most of the smart money’s total capital, and by tracking their inimitable stock picks, Insider Monkey has come up with several investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

David Winters

David Winters

David S. Winter of 40 North Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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. Now let’s analyze the key hedge fund action encompassing Aspen Technology, Inc. (NASDAQ:AZPN).

Do Hedge Funds Think AZPN Is A Good Stock To Buy Now?

At Q1’s end, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the fourth quarter of 2020. By comparison, 20 hedge funds held shares or bullish call options in AZPN a year ago. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

The largest stake in Aspen Technology, Inc. (NASDAQ:AZPN) was held by BlueSpruce Investments, which reported holding $322 million worth of stock at the end of December. It was followed by Alkeon Capital Management with a $200.8 million position. Other investors bullish on the company included 40 North Management, Fisher Asset Management, and Two Creeks Capital Management. In terms of the portfolio weights assigned to each position BlueSpruce Investments allocated the biggest weight to Aspen Technology, Inc. (NASDAQ:AZPN), around 6.39% of its 13F portfolio. Two Creeks Capital Management is also relatively very bullish on the stock, dishing out 4.95 percent of its 13F equity portfolio to AZPN.

Consequently, some big names were leading the bulls’ herd. 40 North Management, managed by David S. Winter and David J. Millstone, created the biggest position in Aspen Technology, Inc. (NASDAQ:AZPN). 40 North Management had $150.3 million invested in the company at the end of the quarter. Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management also made a $6.3 million investment in the stock during the quarter. The following funds were also among the new AZPN investors: Phill Gross and Robert Atchinson’s Adage Capital Management, Chuck Royce’s Royce & Associates, and Qing Li’s Sciencast Management.

Let’s check out hedge fund activity in other stocks similar to Aspen Technology, Inc. (NASDAQ:AZPN). We will take a look at Paylocity Holding Corp (NASDAQ:PCTY), Paysafe Limited (NYSE:PSFE), Western Alliance Bancorporation (NYSE:WAL), McAfee Corp. (NASDAQ:MCFE), ContextLogic Inc. (NASDAQ:WISH), Bruker Corporation (NASDAQ:BRKR), and Arrival (NASDAQ:ARVL). This group of stocks’ market values resemble AZPN’s market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PCTY,22,539146,-4 PSFE,41,1326259,41 WAL,23,141015,1 MCFE,17,174841,-3 WISH,25,297175,1 BRKR,22,219602,-1 ARVL,14,164035,14 Average,23.4,408868,7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.4 hedge funds with bullish positions and the average amount invested in these stocks was $409 million. That figure was $1158 million in AZPN’s case. Paysafe Limited (NYSE:PSFE) is the most popular stock in this table. On the other hand Arrival (NASDAQ:ARVL) is the least popular one with only 14 bullish hedge fund positions. Aspen Technology, Inc. (NASDAQ:AZPN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AZPN is 67.3. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately AZPN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on AZPN were disappointed as the stock returned -0.9% since the end of March (through 7/2) and underperformed the market. If you are interested in investing 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 already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.



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