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 second 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 5 years and analyze what the smart money thinks of Citrix Systems, Inc. (NASDAQ:CTXS) based on that data and determine whether they were really smart about the stock.
Citrix Systems, Inc. (NASDAQ:CTXS) investors should be aware of a decrease in activity from the world's largest hedge funds recently. Citrix Systems, Inc. (NASDAQ:CTXS) was in 36 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 45. There were 38 hedge funds in our database with CTXS holdings at the end of March. Our calculations also showed that CTXS isn't among the 30 most popular stocks among hedge funds (click for Q2 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.
To most stock holders, hedge funds are seen as underperforming, outdated investment tools of yesteryear. While there are more than 8000 funds trading at the moment, We look at the moguls of this group, approximately 850 funds. These hedge fund managers direct bulk of all hedge funds' total capital, and by watching their top picks, Insider Monkey has determined many investment strategies that have historically outrun the market. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Donald Sussman of Paloma Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 let's take a look at the recent hedge fund action regarding Citrix Systems, Inc. (NASDAQ:CTXS).
What have hedge funds been doing with Citrix Systems, Inc. (NASDAQ:CTXS)?
At Q2's end, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CTXS over the last 20 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Karthik Sarma's SRS Investment Management has the largest position in Citrix Systems, Inc. (NASDAQ:CTXS), worth close to $548.2 million, comprising 10.2% of its total 13F portfolio. On SRS Investment Management's heels is Alyeska Investment Group, managed by Anand Parekh, which holds a $72 million position; 1.1% of its 13F portfolio is allocated to the company. Remaining professional money managers with similar optimism comprise Renaissance Technologies, Steve Cohen's Point72 Asset Management and Josh Resnick's Jericho Capital Asset Management. In terms of the portfolio weights assigned to each position SRS Investment Management allocated the biggest weight to Citrix Systems, Inc. (NASDAQ:CTXS), around 10.21% of its 13F portfolio. JS Capital is also relatively very bullish on the stock, setting aside 2.73 percent of its 13F equity portfolio to CTXS.
Since Citrix Systems, Inc. (NASDAQ:CTXS) has experienced bearish sentiment from the aggregate hedge fund industry, it's easy to see that there exists a select few hedge funds that decided to sell off their entire stakes by the end of the second quarter. It's worth mentioning that Matt Sirovich and Jeremy Mindich's Scopia Capital cut the largest investment of the "upper crust" of funds monitored by Insider Monkey, valued at an estimated $123.5 million in stock. Dmitry Balyasny's fund, Balyasny Asset Management, also sold off its stock, about $25.1 million worth. These transactions are important to note, as total hedge fund interest was cut by 2 funds by the end of the second quarter.
Let's now take a look at hedge fund activity in other stocks similar to Citrix Systems, Inc. (NASDAQ:CTXS). We will take a look at First Republic Bank (NYSE:FRC), Paycom Software Inc (NYSE:PAYC), Yum China Holdings, Inc. (NYSE:YUMC), DISH Network Corp. (NASDAQ:DISH), Chewy, Inc. (NYSE:CHWY), Delta Air Lines, Inc. (NYSE:DAL), and Fortis Inc. (NYSE:FTS). This group of stocks' market valuations are similar to CTXS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FRC,37,1192635,9 PAYC,36,503943,6 YUMC,35,839761,11 DISH,54,1703499,10 CHWY,44,569875,8 DAL,39,864778,-14 FTS,8,379313,-7 Average,36.1,864829,3.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 36.1 hedge funds with bullish positions and the average amount invested in these stocks was $865 million. That figure was $1146 million in CTXS's case. DISH Network Corp. (NASDAQ:DISH) is the most popular stock in this table. On the other hand Fortis Inc. (NYSE:FTS) is the least popular one with only 8 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. Our overall hedge fund sentiment score for CTXS is 57.4. 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 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 33% in 2020 through the end of August and surpassed the market by 23.2 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 -1.8% since Q2 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.
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Disclosure: None. This article was originally published at Insider Monkey.