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 Marvell Technology Group Ltd. (NASDAQ:MRVL) based on that data.
Hedge fund interest in Marvell Technology Group Ltd. (NASDAQ:MRVL) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Okta, Inc. (NASDAQ:OKTA), Carrier Global Corporation (NYSE:CARR), and Slack Technologies Inc (NYSE:WORK) to gather more data points. Our calculations also showed that MRVL 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_26335" align="aligncenter" width="399"] Ken Fisher of Fisher Asset Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's check out the new hedge fund action surrounding Marvell Technology Group Ltd. (NASDAQ:MRVL).
Hedge fund activity in Marvell Technology Group Ltd. (NASDAQ:MRVL)
At the end of the first quarter, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2019. By comparison, 32 hedge funds held shares or bullish call options in MRVL a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
The largest stake in Marvell Technology Group Ltd. (NASDAQ:MRVL) was held by Citadel Investment Group, which reported holding $168.8 million worth of stock at the end of September. It was followed by Adage Capital Management with a $63.1 million position. Other investors bullish on the company included Fisher Asset Management, Holocene Advisors, and Cavalry Asset Management. In terms of the portfolio weights assigned to each position Crosslink Capital allocated the biggest weight to Marvell Technology Group Ltd. (NASDAQ:MRVL), around 3.69% of its 13F portfolio. Cavalry Asset Management is also relatively very bullish on the stock, setting aside 3.65 percent of its 13F equity portfolio to MRVL.
Seeing as Marvell Technology Group Ltd. (NASDAQ:MRVL) has experienced falling interest from the aggregate hedge fund industry, it's easy to see that there were a few hedge funds that decided to sell off their full holdings last quarter. At the top of the heap, Alex Sacerdote's Whale Rock Capital Management sold off the biggest position of the "upper crust" of funds followed by Insider Monkey, worth close to $111.5 million in stock, and Brian Ashford-Russell and Tim Woolley's Polar Capital was right behind this move, as the fund sold off about $48.8 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to Marvell Technology Group Ltd. (NASDAQ:MRVL). We will take a look at Okta, Inc. (NASDAQ:OKTA), Carrier Global Corporation (NYSE:CARR), Slack Technologies Inc (NYSE:WORK), and Chewy, Inc. (NYSE:CHWY). All of these stocks' market caps are closest to MRVL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OKTA,48,1086612,9 CARR,3,9338,3 WORK,31,465454,2 CHWY,36,493004,1 Average,29.5,513602,3.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.5 hedge funds with bullish positions and the average amount invested in these stocks was $514 million. That figure was $498 million in MRVL's case. Okta, Inc. (NASDAQ:OKTA) is the most popular stock in this table. On the other hand Carrier Global Corporation (NYSE:CARR) is the least popular one with only 3 bullish hedge fund positions. Marvell Technology Group Ltd. (NASDAQ:MRVL) is not the least popular stock in this group but hedge fund interest is still below average. 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on MRVL as the stock returned 44.5% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.