Is SYNNEX Corporation (NYSE:SNX) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is SYNNEX Corporation (NYSE:SNX) a healthy stock for your portfolio? Prominent investors are taking an optimistic view. The number of long hedge fund bets inched up by 7 lately. Our calculations also showed that SNX isn't among the 30 most popular stocks among hedge funds. SNX was in 18 hedge funds' portfolios at the end of June. There were 11 hedge funds in our database with SNX positions at the end of the previous quarter.
Today there are several metrics shareholders have at their disposal to size up publicly traded companies. A duo of the most innovative metrics are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the top fund managers can outperform the market by a healthy margin (see the details here).
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's take a look at the new hedge fund action encompassing SYNNEX Corporation (NYSE:SNX).
What have hedge funds been doing with SYNNEX Corporation (NYSE:SNX)?
Heading into the third quarter of 2019, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 64% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SNX over the last 16 quarters. With hedgies' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
More specifically, Citadel Investment Group was the largest shareholder of SYNNEX Corporation (NYSE:SNX), with a stake worth $70 million reported as of the end of March. Trailing Citadel Investment Group was Millennium Management, which amassed a stake valued at $43.7 million. Renaissance Technologies, Alyeska Investment Group, and AQR Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
As aggregate interest increased, key hedge funds were breaking ground themselves. ExodusPoint Capital, managed by Michael Gelband, created the largest position in SYNNEX Corporation (NYSE:SNX). ExodusPoint Capital had $2.6 million invested in the company at the end of the quarter. Paul Tudor Jones's Tudor Investment Corp also made a $2.1 million investment in the stock during the quarter. The other funds with brand new SNX positions are Guy Shahar's DSAM Partners, D. E. Shaw's D E Shaw, and Ben Levine, Andrew Manuel and Stefan Renold's LMR Partners.
Let's go over hedge fund activity in other stocks similar to SYNNEX Corporation (NYSE:SNX). These stocks are ICU Medical, Inc. (NASDAQ:ICUI), Science Applications International Corporation (NYSE:SAIC), CVR Energy, Inc. (NYSE:CVI), and Skechers USA Inc (NYSE:SKX). This group of stocks' market caps resemble SNX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ICUI,15,344771,0 SAIC,26,430672,-2 CVI,19,3712499,-3 SKX,23,369669,-1 Average,20.75,1214403,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.75 hedge funds with bullish positions and the average amount invested in these stocks was $1214 million. That figure was $213 million in SNX's case. Science Applications International Corporation (NYSE:SAIC) is the most popular stock in this table. On the other hand ICU Medical, Inc. (NASDAQ:ICUI) is the least popular one with only 15 bullish hedge fund positions. SYNNEX Corporation (NYSE:SNX) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks (view the video below) among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on SNX as the stock returned 15.2% during the same time frame and outperformed the market by an even larger margin. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.