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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Marvell Technology, Inc. (NASDAQ:MRVL).
Marvell Technology, Inc. (NASDAQ:MRVL) was in 51 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 50. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. MRVL investors should be aware of an increase in hedge fund interest of late. There were 33 hedge funds in our database with MRVL holdings at the end of March. Our calculations also showed that MRVL isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Ken Griffin of Citadel Investment Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 fresh hedge fund action surrounding Marvell Technology, Inc. (NASDAQ:MRVL).
Do Hedge Funds Think MRVL Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 51 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 55% from one quarter earlier. On the other hand, there were a total of 41 hedge funds with a bullish position in MRVL a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Josh Resnick's Jericho Capital Asset Management has the largest position in Marvell Technology, Inc. (NASDAQ:MRVL), worth close to $274.6 million, accounting for 6.5% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $265.8 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that are bullish comprise Brian Ashford-Russell and Tim Woolley's Polar Capital, Brandon Haley's Holocene Advisors and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Totem Point Management allocated the biggest weight to Marvell Technology, Inc. (NASDAQ:MRVL), around 7.73% of its 13F portfolio. Cavalry Asset Management is also relatively very bullish on the stock, designating 7.43 percent of its 13F equity portfolio to MRVL.
As aggregate interest increased, specific money managers have been driving this bullishness. Jericho Capital Asset Management, managed by Josh Resnick, assembled the most valuable position in Marvell Technology, Inc. (NASDAQ:MRVL). Jericho Capital Asset Management had $274.6 million invested in the company at the end of the quarter. Brian Ashford-Russell and Tim Woolley's Polar Capital also initiated a $231.9 million position during the quarter. The other funds with brand new MRVL positions are John Hurley's Cavalry Asset Management, Dmitry Balyasny's Balyasny Asset Management, and Kevin Cottrell and Chris LaSusa's KCL Capital.
Let's go over hedge fund activity in other stocks similar to Marvell Technology, Inc. (NASDAQ:MRVL). These stocks are Vodafone Group Plc (NASDAQ:VOD), Veeva Systems Inc (NYSE:VEEV), Dow Inc. (NYSE:DOW), Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG), Bilibili Inc. (NASDAQ:BILI), IQVIA Holdings, Inc. (NYSE:IQV), and Walgreens Boots Alliance Inc (NASDAQ:WBA). This group of stocks' market valuations match MRVL's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VOD,17,703238,0 VEEV,44,1544061,5 DOW,40,518571,-1 SMFG,11,59990,-3 BILI,47,2001370,-6 IQV,69,3809269,7 WBA,41,1113117,0 Average,38.4,1392802,0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.4 hedge funds with bullish positions and the average amount invested in these stocks was $1393 million. That figure was $1390 million in MRVL's case. IQVIA Holdings, Inc. (NYSE:IQV) is the most popular stock in this table. On the other hand Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG) is the least popular one with only 11 bullish hedge fund positions. Marvell Technology, Inc. (NASDAQ:MRVL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MRVL is 74.5. 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 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on MRVL as the stock returned 2.7% since the end of Q2 (through 10/1) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.