Plexus Corp. (PLXS): Are Hedge Funds Right About This Stock?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Plexus Corp. (NASDAQ:PLXS) .

Plexus Corp. (NASDAQ:PLXS) investors should pay attention to an increase in hedge fund sentiment of late. PLXS was in 18 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with PLXS holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Halozyme Therapeutics, Inc. (NASDAQ:HALO), Aircastle Limited (NYSE:AYR), and FCB Financial Holdings Inc (NYSE:FCB) to gather more data points.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

Hedge fund activity in Plexus Corp. (NASDAQ:PLXS)

At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, up by 13% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PLXS over the last 5 quarters. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Fisher Asset Management, led by Ken Fisher, holds the largest position in Plexus Corp. (NASDAQ:PLXS). Fisher Asset Management has a $37.4 million position in the stock. Sitting at the No. 2 spot is Royce & Associates, led by Chuck Royce, which holds a $18.9 million position. Remaining professional money managers that hold long positions include Clint Carlson’s Carlson Capital, Jim Simons’ Renaissance Technologies and Israel Englander’s Millennium Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As aggregate interest increased, specific money managers have been driving this bullishness. Gotham Asset Management, led by Joel Greenblatt, assembled the biggest position in Plexus Corp. (NASDAQ:PLXS). Gotham Asset Management had $0.7 million invested in the company at the end of the quarter. Joshua Packwood and Schuster Tanger’s Radix Partners also initiated a $0.4 million position during the quarter. The following funds were also among the new PLXS investors: Glenn Russell Dubin’s Highbridge Capital Management and Ken Griffin’s Citadel Investment Group.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Plexus Corp. (NASDAQ:PLXS) but similarly valued. These stocks are Halozyme Therapeutics, Inc. (NASDAQ:HALO), Aircastle Limited (NYSE:AYR), FCB Financial Holdings Inc (NYSE:FCB), and American Equity Investment Life Holding (NYSE:AEL). This group of stocks’ market valuations are closest to PLXS’s market valuation.

As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $123 million. That figure was $104 million in PLXS’s case. FCB Financial Holdings Inc (NYSE:FCB) is the most popular stock in this table. On the other hand Aircastle Limited (NYSE:AYR) is the least popular one with only 11 bullish hedge fund positions. Plexus Corp. (NASDAQ:PLXS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard FCB might be a better candidate to consider taking a long position in.

Disclosure: None