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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of December 31st, 2020. In this article we are going to take a look at smart money sentiment towards Kulicke and Soffa Industries Inc. (NASDAQ:KLIC).
Is KLIC stock a buy? Kulicke and Soffa Industries Inc. (NASDAQ:KLIC) has seen an increase in activity from the world's largest hedge funds in recent months. Kulicke and Soffa Industries Inc. (NASDAQ:KLIC) was in 36 hedge funds' portfolios at the end of December. The all time high for this statistic was previously 32. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that KLIC isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Peter Rathjens of Arrowstreet Capital
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Do Hedge Funds Think KLIC Is A Good Stock To Buy Now?
At fourth quarter's end, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the third quarter of 2020. The graph below displays the number of hedge funds with bullish position in KLIC over the last 22 quarters. With hedgies' sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Chuck Royce's Royce & Associates has the most valuable position in Kulicke and Soffa Industries Inc. (NASDAQ:KLIC), worth close to $95.1 million, amounting to 0.8% of its total 13F portfolio. On Royce & Associates's heels is D. E. Shaw of D E Shaw, with a $35.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, George Yang's Anatole Investment Management and Steven Baughman's Divisar Capital. In terms of the portfolio weights assigned to each position Divisar Capital allocated the biggest weight to Kulicke and Soffa Industries Inc. (NASDAQ:KLIC), around 6.84% of its 13F portfolio. Anatole Investment Management is also relatively very bullish on the stock, designating 5.29 percent of its 13F equity portfolio to KLIC.
Consequently, key hedge funds have been driving this bullishness. Harvey Partners, managed by Jeffrey Moskowitz, assembled the largest position in Kulicke and Soffa Industries Inc. (NASDAQ:KLIC). Harvey Partners had $4 million invested in the company at the end of the quarter. Christopher Hillary's Roubaix Capital also made a $1.6 million investment in the stock during the quarter. The other funds with brand new KLIC positions are Steve Cohen's Point72 Asset Management, Matthew Hulsizer's PEAK6 Capital Management, and Philip Hempleman's Ardsley Partners.
Let's also examine hedge fund activity in other stocks similar to Kulicke and Soffa Industries Inc. (NASDAQ:KLIC). We will take a look at Viela Bio, Inc. (NASDAQ:VIE), Tootsie Roll Industries, Inc. (NYSE:TR), The Providence Service Corporation (NASDAQ:PRSC), Cactus, Inc. (NYSE:WHD), Trinseo S.A. (NYSE:TSE), Mueller Water Products, Inc. (NYSE:MWA), and Azure Power Global Limited (NYSE:AZRE). This group of stocks' market caps match KLIC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VIE,9,202839,4 TR,14,67904,-1 PRSC,17,410906,2 WHD,19,106134,-1 TSE,16,53801,3 MWA,20,270520,-4 AZRE,9,38302,5 Average,14.9,164344,1.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.9 hedge funds with bullish positions and the average amount invested in these stocks was $164 million. That figure was $328 million in KLIC's case. Mueller Water Products, Inc. (NYSE:MWA) is the most popular stock in this table. On the other hand Viela Bio, Inc. (NASDAQ:VIE) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Kulicke and Soffa Industries Inc. (NASDAQ:KLIC) is more popular among hedge funds. Our overall hedge fund sentiment score for KLIC is 90. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 7.9% in 2021 through April 1st but still managed to beat the market by 0.4 percentage points. Hedge funds were also right about betting on KLIC as the stock returned 62% since the end of December (through 4/1) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.