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Hedge Funds Are Buying Himax Technologies, Inc. (HIMX)

Abigail Fisher

We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Himax Technologies, Inc. (NASDAQ:HIMX) based on that data.

Himax Technologies, Inc. (NASDAQ:HIMX) was in 9 hedge funds' portfolios at the end of March. HIMX investors should pay attention to an increase in hedge fund interest of late. There were 4 hedge funds in our database with HIMX positions at the end of the previous quarter. Our calculations also showed that HIMX isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.

According to most shareholders, hedge funds are viewed as unimportant, old investment tools of the past. While there are greater than 8000 funds in operation today, We hone in on the crème de la crème of this club, around 850 funds. These investment experts shepherd the majority of the hedge fund industry's total asset base, and by monitoring their best picks, Insider Monkey has deciphered numerous investment strategies that have historically outperformed Mr. Market. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

[caption id="attachment_727964" align="aligncenter" width="393"] William Graves of Boardman Bay Capital Management[/caption]

William Graves Boardman Bay Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's analyze the fresh hedge fund action surrounding Himax Technologies, Inc. (NASDAQ:HIMX).

What have hedge funds been doing with Himax Technologies, Inc. (NASDAQ:HIMX)?

At the end of the first quarter, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 125% from the previous quarter. The graph below displays the number of hedge funds with bullish position in HIMX over the last 18 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Yiheng Capital was the largest shareholder of Himax Technologies, Inc. (NASDAQ:HIMX), with a stake worth $14.7 million reported as of the end of September. Trailing Yiheng Capital was Renaissance Technologies, which amassed a stake valued at $9.1 million. Millennium Management, D E Shaw, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Yiheng Capital allocated the biggest weight to Himax Technologies, Inc. (NASDAQ:HIMX), around 1.16% of its 13F portfolio. Boardman Bay Capital Management is also relatively very bullish on the stock, setting aside 0.46 percent of its 13F equity portfolio to HIMX.

Consequently, specific money managers have jumped into Himax Technologies, Inc. (NASDAQ:HIMX) headfirst. Millennium Management, managed by Israel Englander, initiated the most outsized position in Himax Technologies, Inc. (NASDAQ:HIMX). Millennium Management had $5.1 million invested in the company at the end of the quarter. Will Graves's Boardman Bay Capital Management also made a $0.5 million investment in the stock during the quarter. The other funds with brand new HIMX positions are Donald Sussman's Paloma Partners, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, and Greg Eisner's Engineers Gate Manager.

Let's go over hedge fund activity in other stocks similar to Himax Technologies, Inc. (NASDAQ:HIMX). These stocks are Dime Community Bancshares, Inc. (NASDAQ:DCOM), Diamond S Shipping Inc. (NYSE:DSSI), Brigham Minerals, Inc. (NYSE:MNRL), and Enova International Inc (NYSE:ENVA). This group of stocks' market caps are similar to HIMX's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DCOM,10,37714,0 DSSI,16,50899,-2 MNRL,19,54263,-4 ENVA,17,81510,-4 Average,15.5,56097,-2.5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $56 million. That figure was $31 million in HIMX's case. Brigham Minerals, Inc. (NYSE:MNRL) is the most popular stock in this table. On the other hand Dime Community Bancshares, Inc. (NASDAQ:DCOM) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Himax Technologies, Inc. (NASDAQ:HIMX) is even less popular than DCOM. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but managed to beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on HIMX, though not to the same extent, as the stock returned 23.7% during the second quarter (through June 22nd) and outperformed the market as well.

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

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