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Is CTXS Stock A Buy or Sell?

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·5 min read
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Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren't timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Citrix Systems, Inc. (NASDAQ:CTXS) changed recently.

Is CTXS stock a buy? Citrix Systems, Inc. (NASDAQ:CTXS) was in 29 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 45. CTXS shareholders have witnessed a decrease in activity from the world's largest hedge funds recently. There were 31 hedge funds in our database with CTXS positions at the end of the third quarter. Our calculations also showed that CTXS isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Jeffrey Tannenbaum of Fir Tree

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. Keeping this in mind we're going to take a look at the latest hedge fund action regarding Citrix Systems, Inc. (NASDAQ:CTXS).

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

At fourth quarter's end, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from one quarter earlier. On the other hand, there were a total of 34 hedge funds with a bullish position in CTXS 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.

The largest stake in Citrix Systems, Inc. (NASDAQ:CTXS) was held by Arrowstreet Capital, which reported holding $113.7 million worth of stock at the end of December. It was followed by AQR Capital Management with a $49.4 million position. Other investors bullish on the company included GLG Partners, Fir Tree, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Fir Tree allocated the biggest weight to Citrix Systems, Inc. (NASDAQ:CTXS), around 1.66% of its 13F portfolio. Diker Management is also relatively very bullish on the stock, setting aside 0.99 percent of its 13F equity portfolio to CTXS.

Due to the fact that Citrix Systems, Inc. (NASDAQ:CTXS) has witnessed a decline in interest from the smart money, it's safe to say that there exists a select few hedge funds who sold off their positions entirely in the fourth quarter. It's worth mentioning that Karthik Sarma's SRS Investment Management said goodbye to the largest position of all the hedgies followed by Insider Monkey, valued at close to $195.5 million in stock. John Overdeck and David Siegel's fund, Two Sigma Advisors, also said goodbye to its stock, about $14.8 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 2 funds in the fourth quarter.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Citrix Systems, Inc. (NASDAQ:CTXS) but similarly valued. We will take a look at Seagate Technology plc (NASDAQ:STX), Tiffany & Co. (NYSE:TIF), Varian Medical Systems, Inc. (NYSE:VAR), BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), SK Telecom Co., Ltd. (NYSE:SKM), GoodRx Holdings, Inc. (NASDAQ:GDRX), and Korea Electric Power Corporation (NYSE:KEP). This group of stocks' market valuations match CTXS's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position STX,30,2167418,7 TIF,48,2623109,-13 VAR,49,2414410,-3 BMRN,51,1670835,7 SKM,4,104096,0 GDRX,32,556602,-9 KEP,7,20539,2 Average,31.6,1365287,-1.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.6 hedge funds with bullish positions and the average amount invested in these stocks was $1365 million. That figure was $352 million in CTXS's case. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is the most popular stock in this table. On the other hand SK Telecom Co., Ltd. (NYSE:SKM) is the least popular one with only 4 bullish hedge fund positions. Citrix Systems, Inc. (NASDAQ:CTXS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CTXS is 48.9. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and beat the market by 1.5 percentage points. A small number of hedge funds were also right about betting on CTXS, though not to the same extent, as the stock returned 9.5% since the end of Q4 (through April 12th) and outperformed the market.

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

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