Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds' portfolio positions as of September 30th. What do these smart investors think about Intel Corporation (NASDAQ:INTC)?
Is Intel Corporation (NASDAQ:INTC) the right investment to pursue these days? Hedge funds are taking a bearish view. The number of long hedge fund bets were trimmed by 4 lately. Our calculations also showed that INTC isn't among the 30 most popular stocks among hedge funds. It did rank 14th among billionaires though (30 Stocks Billionaires Are Crazy About: Insider Monkey Billionaire Stock Index), being owned by the likes of Ken Fisher and Cliff Asness.
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 the 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 market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
What have hedge funds been doing with Intel Corporation (NASDAQ:INTC)?
Heading into the fourth quarter of 2018, a total of 58 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 6% dip from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards INTC over the last 13 quarters. With hedgies' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
More specifically, Fisher Asset Management was the largest shareholder of Intel Corporation (NASDAQ:INTC), with a stake worth $1.14 billion reported as of the end of September. Trailing Fisher Asset Management was AQR Capital Management, which amassed a stake valued at $1.04 billion. Citadel Investment Group, Maverick Capital, and Levin Capital Strategies were also very fond of the stock, giving the stock large weights in their portfolios.
Judging by the fact that Intel Corporation (NASDAQ:INTC) has faced falling interest from the aggregate hedge fund industry, logic holds that there were a few funds who were dropping their positions entirely last quarter. At the top of the heap, Philippe Laffont's Coatue Management cut the biggest investment of the "upper crust" of funds followed by Insider Monkey, totaling an estimated $299 million in stock. Christopher Lord's fund, Criterion Capital, also dropped its stock, about $63.9 million worth. These moves are important to note, as total hedge fund interest dropped by 4 funds last quarter.
Let's now review hedge fund activity in other stocks similar to Intel Corporation (NASDAQ:INTC). These stocks are The Boeing Company (NYSE:BA), The Procter & Gamble Company (NYSE:PG), China Mobile Limited (NYSE:CHL), and Novartis AG (NYSE:NVS). All of these stocks' market caps match INTC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BA,53,3749389,0 PG,53,8432523,9 CHL,15,407859,2 NVS,29,1726900,4 Average,37.5,3579,3.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 38 hedge funds with bullish positions and the average amount invested in these stocks was $3.58 billion. That figure was $5.04 billion in INTC's case. The Boeing Company (NYSE:BA) is the most popular stock in this table. On the other hand China Mobile Limited (NYSE:CHL) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Intel Corporation (NASDAQ:INTC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.