After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Citrix Systems, Inc. (NASDAQ:CTXS).
Citrix Systems, Inc. (NASDAQ:CTXS) shareholders have witnessed a decrease in support from the world's most elite money managers lately. Citrix Systems, Inc. (NASDAQ:CTXS) was in 20 hedge funds' portfolios at the end of March. The all time high for this statistic is 45. There were 29 hedge funds in our database with CTXS positions at the end of the fourth quarter. Our calculations also showed that CTXS isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
William Von Mueffling of Cantillon Capital Management
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 gander at the new hedge fund action surrounding Citrix Systems, Inc. (NASDAQ:CTXS).
Do Hedge Funds Think CTXS Is A Good Stock To Buy Now?
At Q1's end, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -31% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CTXS over the last 23 quarters. With hedgies' capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, William von Mueffling's Cantillon Capital Management has the most valuable position in Citrix Systems, Inc. (NASDAQ:CTXS), worth close to $367.6 million, comprising 2.7% of its total 13F portfolio. Coming in second is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $124.2 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions encompass Cliff Asness's AQR Capital Management, and Noam Gottesman's GLG Partners. In terms of the portfolio weights assigned to each position Cantillon Capital Management allocated the biggest weight to Citrix Systems, Inc. (NASDAQ:CTXS), around 2.68% of its 13F portfolio. Force Hill Capital Management is also relatively very bullish on the stock, earmarking 1.85 percent of its 13F equity portfolio to CTXS.
Seeing as Citrix Systems, Inc. (NASDAQ:CTXS) has faced bearish sentiment from the aggregate hedge fund industry, it's easy to see that there lies a certain "tier" of money managers who were dropping their positions entirely heading into Q2. Interestingly, Jeffrey Tannenbaum's Fir Tree said goodbye to the biggest investment of the "upper crust" of funds watched by Insider Monkey, worth about $34.2 million in stock, and Jonathan Soros's JS Capital was right behind this move, as the fund sold off about $7.8 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 9 funds heading into Q2.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Citrix Systems, Inc. (NASDAQ:CTXS) but similarly valued. We will take a look at L Brands Inc (NYSE:LB), Insulet Corporation (NASDAQ:PODD), Tyler Technologies, Inc. (NYSE:TYL), TransUnion (NYSE:TRU), Wheaton Precious Metals Corp. (NYSE:WPM), ON Semiconductor Corporation (NASDAQ:ON), and Quest Diagnostics Incorporated (NYSE:DGX). 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 LB,59,5930346,7 PODD,39,1556378,-2 TYL,28,522802,-4 TRU,41,2289853,0 WPM,28,439920,-6 ON,41,1279457,-4 DGX,34,485336,-11 Average,38.6,1786299,-2.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.6 hedge funds with bullish positions and the average amount invested in these stocks was $1786 million. That figure was $628 million in CTXS's case. L Brands Inc (NYSE:LB) is the most popular stock in this table. On the other hand Tyler Technologies, Inc. (NYSE:TYL) is the least popular one with only 28 bullish hedge fund positions. Compared to these stocks Citrix Systems, Inc. (NASDAQ:CTXS) is even less popular than TYL. Our overall hedge fund sentiment score for CTXS is 9.3. 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. Hedge funds dodged a bullet by taking a bearish stance towards CTXS. Our calculations showed that the top 10 most popular hedge fund stocks 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 but managed to beat the market again by 7.7 percentage points. Unfortunately CTXS wasn't nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); CTXS investors were disappointed as the stock returned -16.9% since the end of the first quarter (through 7/16) 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 most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.