Amkor Technology, Inc. (AMKR): Are Hedge Funds Right About This Stock?

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 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 Amkor Technology, Inc. (NASDAQ:AMKR).

Is Amkor Technology, Inc. (NASDAQ:AMKR) a healthy stock for your portfolio? Money managers were taking a bullish view. The number of bullish hedge fund bets advanced by 6 in recent months. Amkor Technology, Inc. (NASDAQ:AMKR) was in 25 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 29. Our calculations also showed that AMKR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind let’s analyze the key hedge fund action encompassing Amkor Technology, Inc. (NASDAQ:AMKR).

Do Hedge Funds Think AMKR Is A Good Stock To Buy Now?

At third quarter’s end, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 32% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AMKR over the last 25 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

More specifically, SW Investment Management was the largest shareholder of Amkor Technology, Inc. (NASDAQ:AMKR), with a stake worth $59.9 million reported as of the end of September. Trailing SW Investment Management was Bandera Partners, which amassed a stake valued at $39.4 million. AQR Capital Management, Arrowstreet Capital, and Royce & Associates 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 SW Investment Management allocated the biggest weight to Amkor Technology, Inc. (NASDAQ:AMKR), around 23.82% of its 13F portfolio. Bandera Partners is also relatively very bullish on the stock, earmarking 15.9 percent of its 13F equity portfolio to AMKR.

As industrywide interest jumped, some big names were breaking ground themselves. Force Hill Capital Management, managed by Suraj Parkash Chopra, established the biggest position in Amkor Technology, Inc. (NASDAQ:AMKR). Force Hill Capital Management had $5.2 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $2 million investment in the stock during the quarter. The following funds were also among the new AMKR investors: Roger Ibbotson’s Zebra Capital Management, Jinghua Yan’s TwinBeech Capital, and Michael Gelband’s ExodusPoint Capital.

Let’s now review hedge fund activity in other stocks similar to Amkor Technology, Inc. (NASDAQ:AMKR). We will take a look at STAAR Surgical Company (NASDAQ:STAA), INMODE LTD. (NASDAQ:INMD), Fox Factory Holding Corp (NASDAQ:FOXF), Inovalon Holdings Inc (NASDAQ:INOV), Joby Aviation Inc. (NYSE:JOBY), Lumentum Holdings Inc (NASDAQ:LITE), and Primerica, Inc. (NYSE:PRI). This group of stocks’ market caps resemble AMKR’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $499 million. That figure was $208 million in AMKR’s case. Lumentum Holdings Inc (NASDAQ:LITE) is the most popular stock in this table. On the other hand Primerica, Inc. (NYSE:PRI) is the least popular one with only 14 bullish hedge fund positions. Amkor Technology, Inc. (NASDAQ:AMKR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AMKR is 64.8. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 gained 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately AMKR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on AMKR were disappointed as the stock returned -5.3% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.