Hedge Funds Are Freaking Out Over NXP Semiconductors NV (NXPI)

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards NXP Semiconductors NV (NASDAQ:NXPI).

Is NXP Semiconductors NV (NASDAQ:NXPI) the right pick for your portfolio? Money managers are in an optimistic mood. The number of long hedge fund positions increased by 21 recently. At the end of this article we will also compare NXPI to other stocks including Humana Inc (NYSE:HUM), Imperial Oil Limited (USA) (NYSEAMEX:IMO), and Dollar General Corp. (NYSE:DG) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Hedge fund activity in NXP Semiconductors NV (NASDAQ:NXPI)

At Q3’s end, a total of 78 of the hedge funds tracked by Insider Monkey were long this stock, a 37% jump from the second quarter of 2016. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Soroban Capital Partners, managed by Eric W. Mandelblatt, holds the largest position in NXP Semiconductors NV (NASDAQ:NXPI). Soroban Capital Partners has a $534.1 million position in the stock, comprising 3.2% of its 13F portfolio. The second largest stake is held by Cantillon Capital Management, managed by William von Mueffling, which holds a $277.4 million position; the fund has 3.9% of its 13F portfolio invested in the stock. Some other peers that are bullish comprise Ken Griffin’s Citadel Investment Group, Ken Fisher’s Fisher Asset Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

As aggregate interest increased, key hedge funds have been driving this bullishness. Cantillon Capital Management assembled the most outsized position in NXP Semiconductors NV (NASDAQ:NXPI), followed by Matthew Halbower’s Pentwater Capital Management, which made a $90.8 million investment in the stock during the quarter. The other funds with brand new NXPI positions are Doug Silverman and Alexander Klabin’s Senator Investment Group, Leon Shaulov’s Maplelane Capital, and Benjamin A. Smith’s Laurion Capital Management.

Let’s now review hedge fund activity in other stocks similar to NXP Semiconductors NV (NASDAQ:NXPI). We will take a look at Humana Inc (NYSE:HUM), Imperial Oil Limited (USA) (NYSEAMEX:IMO), Dollar General Corp. (NYSE:DG), and Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS). This group of stocks’ market values are closest to NXPI’s market value.

As you can see these stocks had an average of 32.75 hedge funds with bullish positions and the average amount invested in these stocks was $1.80 billion. That figure was $2.62 billion in NXPI’s case. Humana Inc (NYSE:HUM) is the most popular stock in this table. On the other hand Imperial Oil Limited (USA) (NYSEAMEX:IMO) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks NXP Semiconductors NV (NASDAQ:NXPI) 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