Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Citrix Systems, Inc. (NASDAQ:CTXS) investors should pay attention to a decrease in hedge fund sentiment recently. At the end of this article we will also compare CTXS to other stocks, including Realty Income Corp (NYSE:O), SanDisk Corporation (NASDAQ:SNDK), and Coca-Cola Enterprises Inc (NYSE:CCE) to get a better sense of its popularity.
Follow Citrix Systems Inc (NASDAQ:CTXS)
Follow Citrix Systems Inc (NASDAQ:CTXS)
In the financial world there are several signals shareholders put to use to grade publicly traded companies. Some of the most under-the-radar signals are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the elite investment managers can outclass their index-focused peers by a significant margin (see the details here).
Keeping this in mind, let’s take a gander at the key action encompassing Citrix Systems, Inc. (NASDAQ:CTXS).
How are hedge funds trading Citrix Systems, Inc. (NASDAQ:CTXS)?
At Q3’s end, a total of 38 of the hedge funds tracked by Insider Monkey held long positions in this stock, inching down by 3% from the second quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Elliott Management, managed by Paul Singer, holds the most valuable position in Citrix Systems, Inc. (NASDAQ:CTXS), worth an estimated $406.7 million and comprising 7.8% of its 13F portfolio. Sitting at the No. 2 spot is Bain Capital of Brookside Capital, with a $209 million position; the fund has 6.2% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish encompass Peter Adam Hochfelder’s Brahman Capital, D. E. Shaw’s D E Shaw and Cliff Asness’s AQR Capital Management.
Judging by the fact that Citrix Systems, Inc. (NASDAQ:CTXS) has witnessed falling interest from hedge fund managers, logic holds that there exists a select few money managers who were dropping their full holdings heading into Q4. Intriguingly, Jim Simons’s Renaissance Technologies said goodbye to the biggest stake of all the hedgies followed by Insider Monkey, worth close to $17.9 million in stock. Millennium Management Subsidiary’s fund, Blue Arrow Capital Management, also said goodbye to its investment in the company, about $11.9 million worth of CTXS shares. These moves are important to note, as total hedge fund interest dropped by 1 fund heading into Q4.
Let’s go over hedge fund activity in other stocks similar to Citrix Systems, Inc. (NASDAQ:CTXS). We will take a look at Realty Income Corp (NYSE:O), SanDisk Corporation (NASDAQ:SNDK), Coca-Cola Enterprises Inc (NYSE:CCE), and Henry Schein, Inc. (NASDAQ:HSIC). All of these stocks’ market caps match CTXS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| O | 13 | 93579 | 1 |
| SNDK | 38 | 1024414 | -12 |
| CCE | 28 | 847569 | -4 |
| HSIC | 22 | 388271 | 5 |
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $588 million. That figure was $1.44 billion in CTXS’s case. SanDisk Corporation (NASDAQ:SNDK) is the most popular stock in this table. On the other hand Realty Income Corp (NYSE:O) is the least popular one with only 13 bullish hedge fund positions. Both Citrix Systems, Inc. (NASDAQ:CTXS) and SanDisk Corporation (NASDAQ:SNDK) are the leaders of this group and have also attracted significant investments from the hedge fund community, north of $1 billion. We think an in-depth analysis into both stocks is necessary before adding them to your portfolio.
