At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Skyworks Solutions Inc (NASDAQ:SWKS).
Skyworks Solutions Inc (NASDAQ:SWKS) was in 29 hedge funds' portfolios at the end of the first quarter of 2020. SWKS investors should pay attention to a decrease in enthusiasm from smart money of late. There were 43 hedge funds in our database with SWKS holdings at the end of the previous quarter. Our calculations also showed that SWKS isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
If you'd ask most market participants, hedge funds are seen as slow, outdated investment tools of years past. While there are more than 8000 funds with their doors open at present, We choose to focus on the moguls of this club, around 850 funds. These investment experts handle bulk of all hedge funds' total asset base, and by keeping an eye on their inimitable investments, Insider Monkey has brought to light numerous investment strategies that have historically surpassed Mr. Market. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_339612" align="aligncenter" width="390"] Kerr Neilson of Platinum Asset Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to take a look at the new hedge fund action surrounding Skyworks Solutions Inc (NASDAQ:SWKS).
How have hedgies been trading Skyworks Solutions Inc (NASDAQ:SWKS)?
At the end of the first quarter, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -33% from the fourth quarter of 2019. On the other hand, there were a total of 38 hedge funds with a bullish position in SWKS a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the largest position in Skyworks Solutions Inc (NASDAQ:SWKS). AQR Capital Management has a $313.5 million position in the stock, comprising 0.5% of its 13F portfolio. Sitting at the No. 2 spot is Platinum Asset Management, led by Kerr Neilson, holding a $207.4 million position; 5.2% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions contain Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Platinum Asset Management allocated the biggest weight to Skyworks Solutions Inc (NASDAQ:SWKS), around 5.24% of its 13F portfolio. Bronson Point Partners is also relatively very bullish on the stock, setting aside 2.18 percent of its 13F equity portfolio to SWKS.
Since Skyworks Solutions Inc (NASDAQ:SWKS) has witnessed a decline in interest from the smart money, we can see that there exists a select few hedge funds that slashed their positions entirely heading into Q4. It's worth mentioning that Ken Heebner's Capital Growth Management dumped the largest investment of all the hedgies tracked by Insider Monkey, comprising close to $38.1 million in stock, and John Hurley's Cavalry Asset Management was right behind this move, as the fund cut about $35.2 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 14 funds heading into Q4.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Skyworks Solutions Inc (NASDAQ:SWKS) but similarly valued. We will take a look at BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), Marvell Technology Group Ltd. (NASDAQ:MRVL), Okta, Inc. (NASDAQ:OKTA), and Carrier Global Corporation (NYSE:CARR). This group of stocks' market values are similar to SWKS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BMRN,54,1567492,5 MRVL,29,498283,0 OKTA,48,1086612,9 CARR,3,9338,3 Average,33.5,790431,4.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.5 hedge funds with bullish positions and the average amount invested in these stocks was $790 million. That figure was $769 million in SWKS's case. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is the most popular stock in this table. On the other hand Carrier Global Corporation (NYSE:CARR) is the least popular one with only 3 bullish hedge fund positions. Skyworks Solutions Inc (NASDAQ:SWKS) is not the least popular stock in this group but hedge fund interest is still below average. 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on SWKS as the stock returned 33.1% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.