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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 have processed the filings of the more than 867 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30th holdings, data that is available nowhere else. Should you consider Viavi Solutions Inc (NASDAQ:VIAV) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Viavi Solutions Inc (NASDAQ:VIAV) shareholders have witnessed a decrease in support from the world's most elite money managers lately. Viavi Solutions Inc (NASDAQ:VIAV) was in 23 hedge funds' portfolios at the end of September. The all time high for this statistic is 37. There were 24 hedge funds in our database with VIAV holdings at the end of June. Our calculations also showed that VIAV isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Robert Atchinson of Adage Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Now we're going to take a glance at the fresh hedge fund action regarding Viavi Solutions Inc (NASDAQ:VIAV).
Do Hedge Funds Think VIAV Is A Good Stock To Buy Now?
At third quarter's end, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the second quarter of 2021. By comparison, 29 hedge funds held shares or bullish call options in VIAV a year ago. With hedgies' capital changing hands, there exists an "upper tier" of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
More specifically, Woodline Partners was the largest shareholder of Viavi Solutions Inc (NASDAQ:VIAV), with a stake worth $47.4 million reported as of the end of September. Trailing Woodline Partners was Millennium Management, which amassed a stake valued at $40.2 million. Adage Capital Management, Renaissance Technologies, and Force Hill Capital Management 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 Boardman Bay Capital Management allocated the biggest weight to Viavi Solutions Inc (NASDAQ:VIAV), around 5.05% of its 13F portfolio. Force Hill Capital Management is also relatively very bullish on the stock, setting aside 4.65 percent of its 13F equity portfolio to VIAV.
Judging by the fact that Viavi Solutions Inc (NASDAQ:VIAV) has faced a decline in interest from hedge fund managers, it's easy to see that there were a few money managers that slashed their full holdings in the third quarter. Intriguingly, D. E. Shaw's D E Shaw dumped the largest investment of the 750 funds tracked by Insider Monkey, totaling an estimated $41.5 million in stock, and Ken Griffin's Citadel Investment Group was right behind this move, as the fund cut about $15.4 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 1 funds in the third quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Viavi Solutions Inc (NASDAQ:VIAV) but similarly valued. These stocks are Riskified Ltd. (NYSE:RSKD), frontdoor, inc. (NASDAQ:FTDR), Apple Hospitality REIT Inc (NYSE:APLE), Altra Industrial Motion Corp. (NASDAQ:AIMC), Box, Inc. (NYSE:BOX), Resideo Technologies, Inc. (NYSE:REZI), and Enact Holdings Inc. (NASDAQ:ACT). This group of stocks' market valuations resemble VIAV's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RSKD,16,59652,16 FTDR,36,574044,3 APLE,15,186645,-1 AIMC,14,18481,8 BOX,29,644232,-6 REZI,28,525837,0 ACT,22,173786,22 Average,22.9,311811,6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.9 hedge funds with bullish positions and the average amount invested in these stocks was $312 million. That figure was $228 million in VIAV's case. frontdoor, inc. (NASDAQ:FTDR) is the most popular stock in this table. On the other hand Altra Industrial Motion Corp. (NASDAQ:AIMC) is the least popular one with only 14 bullish hedge fund positions. Viavi Solutions Inc (NASDAQ:VIAV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VIAV is 43.1. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately VIAV wasn't nearly as popular as these 5 stocks and hedge funds that were betting on VIAV were disappointed as the stock returned 2.7% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.