The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 752 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article we look at what those investors think of MKS Instruments, Inc. (NASDAQ:MKSI).
MKS Instruments, Inc. (NASDAQ:MKSI) shareholders have witnessed a decrease in hedge fund sentiment lately. MKSI was in 17 hedge funds' portfolios at the end of September. There were 19 hedge funds in our database with MKSI positions at the end of the previous quarter. Our calculations also showed that MKSI isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. 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 Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_25717" align="aligncenter" width="440"] Steven Cohen of Point72 Asset Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. We're going to review the latest hedge fund action regarding MKS Instruments, Inc. (NASDAQ:MKSI).
How have hedgies been trading MKS Instruments, Inc. (NASDAQ:MKSI)?
At Q3's end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the second quarter of 2019. By comparison, 25 hedge funds held shares or bullish call options in MKSI a year ago. With hedgies' capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
The largest stake in MKS Instruments, Inc. (NASDAQ:MKSI) was held by Royce & Associates, which reported holding $107 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $104.6 million position. Other investors bullish on the company included Fisher Asset Management, Point72 Asset Management, and Partner Fund Management. In terms of the portfolio weights assigned to each position BeaconLight Capital allocated the biggest weight to MKS Instruments, Inc. (NASDAQ:MKSI), around 1.41% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, designating 0.99 percent of its 13F equity portfolio to MKSI.
Because MKS Instruments, Inc. (NASDAQ:MKSI) has witnessed falling interest from the smart money, logic holds that there is a sect of hedgies who sold off their positions entirely last quarter. Intriguingly, Ken Griffin's Citadel Investment Group said goodbye to the largest stake of the 750 funds followed by Insider Monkey, worth about $12 million in stock. Highbridge Capital Management, also cut its stock, about $3.1 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 2 funds last quarter.
Let's now review hedge fund activity in other stocks similar to MKS Instruments, Inc. (NASDAQ:MKSI). We will take a look at Capri Holdings Limited (NYSE:CPRI), First Industrial Realty Trust, Inc. (NYSE:FR), PS Business Parks Inc (NYSE:PSB), and OneMain Holdings Inc (NYSE:OMF). This group of stocks' market caps resemble MKSI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CPRI,37,920218,2 FR,16,240768,-2 PSB,17,60032,3 OMF,26,398536,-1 Average,24,404889,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $405 million. That figure was $412 million in MKSI's case. Capri Holdings Limited (NYSE:CPRI) is the most popular stock in this table. On the other hand First Industrial Realty Trust, Inc. (NYSE:FR) is the least popular one with only 16 bullish hedge fund positions. MKS Instruments, Inc. (NASDAQ:MKSI) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on MKSI as the stock returned 15.4% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.