Where Do Hedge Funds Stand On Kulicke and Soffa Industries Inc. (KLIC)?
The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Kulicke and Soffa Industries Inc. (NASDAQ:KLIC).
Kulicke and Soffa Industries Inc. (NASDAQ:KLIC) shareholders have witnessed a decrease in enthusiasm from smart money of late. Kulicke and Soffa Industries Inc. (NASDAQ:KLIC) was in 34 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 36. Our calculations also showed that KLIC isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 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 S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Chuck Royce of Royce & Associates
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery 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. Now we're going to take a peek at the new hedge fund action surrounding Kulicke and Soffa Industries Inc. (NASDAQ:KLIC).
Do Hedge Funds Think KLIC Is A Good Stock To Buy Now?
At first quarter's end, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the previous quarter. The graph below displays the number of hedge funds with bullish position in KLIC over the last 23 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Royce & Associates held the most valuable stake in Kulicke and Soffa Industries Inc. (NASDAQ:KLIC), which was worth $155.4 million at the end of the fourth quarter. On the second spot was Arrowstreet Capital which amassed $42.2 million worth of shares. D E Shaw, Divisar Capital, and Fisher 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 Divisar Capital allocated the biggest weight to Kulicke and Soffa Industries Inc. (NASDAQ:KLIC), around 9.48% of its 13F portfolio. SW Investment Management is also relatively very bullish on the stock, earmarking 5.52 percent of its 13F equity portfolio to KLIC.
Seeing as Kulicke and Soffa Industries Inc. (NASDAQ:KLIC) has experienced bearish sentiment from the smart money, logic holds that there lies a certain "tier" of hedgies who sold off their entire stakes last quarter. At the top of the heap, George Yang's Anatole Investment Management said goodbye to the biggest investment of the 750 funds watched by Insider Monkey, comprising about $24.9 million in stock. Christopher Hillary's fund, Roubaix Capital, also said goodbye to its stock, about $1.6 million worth. These moves are important to note, as total hedge fund interest fell by 2 funds last quarter.
Let's check out hedge fund activity in other stocks similar to Kulicke and Soffa Industries Inc. (NASDAQ:KLIC). We will take a look at Seer, Inc. (NASDAQ:SEER), Poshmark, Inc. (NASDAQ:POSH), Hecla Mining Company (NYSE:HL), Momo Inc (NASDAQ:MOMO), Signet Jewelers Limited (NYSE:SIG), Integer Holdings Corporation (NYSE:ITGR), and CommVault Systems, Inc. (NASDAQ:CVLT). This group of stocks' market values are closest to KLIC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SEER,12,342872,-2 POSH,14,26589,14 HL,16,39714,6 MOMO,25,342421,1 SIG,26,945716,-4 ITGR,16,217349,-8 CVLT,23,533620,0 Average,18.9,349754,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.9 hedge funds with bullish positions and the average amount invested in these stocks was $350 million. That figure was $429 million in KLIC's case. Signet Jewelers Limited (NYSE:SIG) is the most popular stock in this table. On the other hand Seer, Inc. (NASDAQ:SEER) is the least popular one with only 12 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 81.3. 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 19.3% in 2021 through June 25th but still managed to beat the market by 4.8 percentage points. Hedge funds were also right about betting on KLIC as the stock returned 25.4% since the end of March (through 6/25) 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.
