Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Citrix Systems, Inc. (NASDAQ:CTXS) based on that data.
Citrix Systems, Inc. (NASDAQ:CTXS) shareholders have witnessed an increase in hedge fund interest lately. CTXS was in 38 hedge funds' portfolios at the end of March. There were 34 hedge funds in our database with CTXS positions at the end of the previous quarter. Our calculations also showed that CTXS 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.
In the financial world there are tons of indicators stock traders have at their disposal to value publicly traded companies. A pair of the less utilized indicators are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the elite money managers can outperform the market by a healthy amount (see the details here).
[caption id="attachment_26345" align="aligncenter" width="400"] Paul Singer of Elliott Management[/caption]
At Insider Monkey 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 this one. 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. Keeping this in mind let's analyze the recent hedge fund action regarding Citrix Systems, Inc. (NASDAQ:CTXS).
How are hedge funds trading Citrix Systems, Inc. (NASDAQ:CTXS)?
At Q1's end, a total of 38 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 12% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards CTXS over the last 18 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, SRS Investment Management was the largest shareholder of Citrix Systems, Inc. (NASDAQ:CTXS), with a stake worth $417.3 million reported as of the end of September. Trailing SRS Investment Management was Jericho Capital Asset Management, which amassed a stake valued at $138.8 million. Citadel Investment Group, Scopia Capital, and Holocene Advisors 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 Scopia Capital allocated the biggest weight to Citrix Systems, Inc. (NASDAQ:CTXS), around 11.29% of its 13F portfolio. Jericho Capital Asset Management is also relatively very bullish on the stock, earmarking 11.16 percent of its 13F equity portfolio to CTXS.
Now, key hedge funds were breaking ground themselves. Jericho Capital Asset Management, managed by Josh Resnick, assembled the biggest position in Citrix Systems, Inc. (NASDAQ:CTXS). Jericho Capital Asset Management had $138.8 million invested in the company at the end of the quarter. Jonathan Soros's JS Capital also initiated a $21.9 million position during the quarter. The following funds were also among the new CTXS investors: Spencer M. Waxman's Shannon River Fund Management, Paul Marshall and Ian Wace's Marshall Wace LLP, and Sahm Adrangi's Kerrisdale Capital.
Let's check out hedge fund activity in other stocks similar to Citrix Systems, Inc. (NASDAQ:CTXS). These stocks are Alexandria Real Estate Equities Inc (NYSE:ARE), TransDigm Group Incorporated (NYSE:TDG), Williams Companies, Inc. (NYSE:WMB), and Realty Income Corporation (NYSE:O). This group of stocks' market caps are similar to CTXS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ARE,29,196351,8 TDG,58,3800759,-5 WMB,47,552828,7 O,25,225190,-1 Average,39.75,1193782,2.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 39.75 hedge funds with bullish positions and the average amount invested in these stocks was $1194 million. That figure was $1418 million in CTXS's case. TransDigm Group Incorporated (NYSE:TDG) is the most popular stock in this table. On the other hand Realty Income Corporation (NYSE:O) is the least popular one with only 25 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 surpassed the market by 13.2 percentage points. Unfortunately CTXS wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); CTXS investors were disappointed as the stock returned 4.6% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.