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Was The Smart Money Right About Xilinx, Inc. (XLNX)?

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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 873 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of June 30th, 2021. In this article we are going to take a look at smart money sentiment towards Xilinx, Inc. (NASDAQ:XLNX).

Xilinx, Inc. (NASDAQ:XLNX) shareholders have witnessed an increase in hedge fund sentiment of late. Xilinx, Inc. (NASDAQ:XLNX) was in 59 hedge funds' portfolios at the end of June. The all time high for this statistic is 66. Our calculations also showed that XLNX isn't among the 30 most popular stocks among hedge funds (click for Q2 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 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Josh Friedman Canyon Capital
Josh Friedman Canyon Capital

Joshua Friedman of Canyon Capital Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, the demand for helium is soaring and there is a helium supply shortage, so we are checking out stock pitches like this emerging helium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let's take a glance at the key hedge fund action surrounding Xilinx, Inc. (NASDAQ:XLNX).

Do Hedge Funds Think XLNX Is A Good Stock To Buy Now?

At second quarter's end, a total of 59 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards XLNX over the last 24 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, 0 held the most valuable stake in Xilinx, Inc. (NASDAQ:XLNX), which was worth $327.7 million at the end of the second quarter. On the second spot was Matrix Capital Management which amassed $303.7 million worth of shares. Pentwater Capital Management, Canyon Capital Advisors, and Balyasny Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Sand Grove Capital Partners allocated the biggest weight to Xilinx, Inc. (NASDAQ:XLNX), around 12.8% of its 13F portfolio. Hunting Hill Global Capital is also relatively very bullish on the stock, setting aside 11.16 percent of its 13F equity portfolio to XLNX.

Consequently, specific money managers have been driving this bullishness. Alyeska Investment Group, managed by Anand Parekh, initiated the biggest position in Xilinx, Inc. (NASDAQ:XLNX). Alyeska Investment Group had $44.2 million invested in the company at the end of the quarter. Matthew Moskey and Friedrich Schulte-Hillen's Athos Capital also initiated a $26.7 million position during the quarter. The following funds were also among the new XLNX investors: Nathaniel August's Mangrove Partners, John Osterweis's Osterweis Capital Management, and Wayne Yu's BCK Capital.

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Xilinx, Inc. (NASDAQ:XLNX) but similarly valued. We will take a look at TransDigm Group Incorporated (NYSE:TDG), Xcel Energy Inc (NASDAQ:XEL), Brown-Forman Corporation (NYSE:BF), Alcon Inc. (NYSE:ALC), Republic Services, Inc. (NYSE:RSG), Otis Worldwide Corporation (NYSE:OTIS), and SBA Communications Corporation (NASDAQ:SBAC). This group of stocks' market values are closest to XLNX's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TDG,57,7351832,-5 XEL,22,235410,4 BF,31,1667783,-4 ALC,22,727825,-1 RSG,34,1289299,-2 OTIS,45,2406679,-7 SBAC,43,2156941,5 Average,36.3,2262253,-1.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 36.3 hedge funds with bullish positions and the average amount invested in these stocks was $2262 million. That figure was $4162 million in XLNX's case. TransDigm Group Incorporated (NYSE:TDG) is the most popular stock in this table. On the other hand Xcel Energy Inc (NASDAQ:XEL) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Xilinx, Inc. (NASDAQ:XLNX) is more popular among hedge funds. Our overall hedge fund sentiment score for XLNX is 83.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 26.3% in 2021 through October 29th but still managed to beat the market by 2.3 percentage points. Hedge funds were also right about betting on XLNX as the stock returned 24.4% since the end of June (through 10/29) 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.