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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 Lattice Semiconductor Corporation (NASDAQ:LSCC) changed recently.
Is Lattice Semiconductor Corporation (NASDAQ:LSCC) an excellent investment today? The best stock pickers were getting more bullish. The number of long hedge fund bets rose by 1 in recent months. Lattice Semiconductor Corporation (NASDAQ:LSCC) was in 24 hedge funds' portfolios at the end of March. The all time high for this statistic is 32. Our calculations also showed that LSCC isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 23 hedge funds in our database with LSCC positions at the end of the fourth quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Tim Woolley of Polar Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. With all of this in mind we're going to take a look at the new hedge fund action surrounding Lattice Semiconductor Corporation (NASDAQ:LSCC).
Do Hedge Funds Think LSCC Is A Good Stock To Buy Now?
At the end of March, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards LSCC over the last 23 quarters. With hedgies' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
More specifically, Sylebra Capital Management was the largest shareholder of Lattice Semiconductor Corporation (NASDAQ:LSCC), with a stake worth $101.1 million reported as of the end of March. Trailing Sylebra Capital Management was Polar Capital, which amassed a stake valued at $77.2 million. Royce & Associates, Millennium Management, and D E Shaw 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 Sylebra Capital Management allocated the biggest weight to Lattice Semiconductor Corporation (NASDAQ:LSCC), around 2.61% of its 13F portfolio. Southport Management is also relatively very bullish on the stock, designating 1.25 percent of its 13F equity portfolio to LSCC.
As industrywide interest jumped, key money managers have jumped into Lattice Semiconductor Corporation (NASDAQ:LSCC) headfirst. Woodline Partners, managed by Michael Rockefeller and KarláKroeker, assembled the most outsized position in Lattice Semiconductor Corporation (NASDAQ:LSCC). Woodline Partners had $8.2 million invested in the company at the end of the quarter. Matthew Hulsizer's PEAK6 Capital Management also initiated a $0.8 million position during the quarter. The other funds with new positions in the stock are Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors, Karim Abbadi and Edward McBride's Centiva Capital, and Jonathan Soros's JS Capital.
Let's now take a look at hedge fund activity in other stocks similar to Lattice Semiconductor Corporation (NASDAQ:LSCC). We will take a look at Coursera, Inc. (NYSE:COUR), Cimarex Energy Co (NYSE:XEC), Allakos Inc. (NASDAQ:ALLK), Nexstar Media Group, Inc. (NASDAQ:NXST), loanDepot, Inc. (NYSE:LDI), Gildan Activewear Inc (NYSE:GIL), and Saia Inc (NASDAQ:SAIA). All of these stocks' market caps are closest to LSCC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position COUR,25,119794,25 XEC,39,775009,5 ALLK,13,456292,2 NXST,35,945735,-9 LDI,6,8347,6 GIL,17,643419,0 SAIA,16,420526,0 Average,21.6,481303,4.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.6 hedge funds with bullish positions and the average amount invested in these stocks was $481 million. That figure was $277 million in LSCC's case. Cimarex Energy Co (NYSE:XEC) is the most popular stock in this table. On the other hand loanDepot, Inc. (NYSE:LDI) is the least popular one with only 6 bullish hedge fund positions. Lattice Semiconductor Corporation (NASDAQ:LSCC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LSCC is 55.8. 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 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 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Hedge funds were also right about betting on LSCC, though not to the same extent, as the stock returned 11.6% since Q1 (through July 16th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.