After institutional investors had submitted their 13F filings with the U.S. Securities and Exchange Commission for the quarter ended June 30, we analyzed the equity portfolios of a pool of over 700 funds. As usual, these investors focused on large-cap companies, which ranked among the most popular. However, these stocks are more efficiently priced and don’t provide a lot of upside for a smaller investor. On the other hand, mid-cap stocks can usually offer more opportunities and, with this in mind, we have compiled a list of five mid-cap tech stocks that attracted the attention of hedge funds during the second quarter.
We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular small-cap stock picks in real time since the end of August 2012. These stocks have returned 123% since then and outperformed the S&P 500 Index by around 65 percentage points (see the details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.
5. Autodesk, Inc. (NASDAQ:ADSK)
Investors with Long Positions (as of June 30): 45
Aggregate Value of Investors’ Holdings (as of June 30): $2.25 Billion
To begin with, let’s have a look at Autodesk, Inc. (NASDAQ:ADSK), a San Rafael, California-based software corporation, in which the number of investors with long positions declined by three during the second quarter, while the aggregate value of their positions slid from $2.52 billion at the end of March. The company recently announced the integration of its 3D printing experience in Windows 10, expanding the application’s possible reach. Moreover, Autodesk, Inc. (NASDAQ:ADSK) is currently making deeper forays into the gaming industry by creating Stingray, a gaming engine and real-time rendering application program. Nevertheless, the company’s return on equity has slumped by 35% on the year to around 3.20% as of April 30, which is not a good sign for the software corporation. Soroban Capital Partners, headed by Eric W. Mandelblatt, is the largest shareholder of Autodesk among the funds we track, holding 10.34 million shares valued at $517.65 million, followed by billionaire Stephen Mandel’s Lone Pine Capital with 6.16 million shares worth $308.41 million as of the end of June.