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Did Hedge Funds Drop The Ball On Xperi Corporation (XPER) ?

The Insider Monkey team has completed processing the quarterly 13F filings for the December quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors endured a torrid quarter, 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 Xperi Corporation (NASDAQ:XPER).

Is Xperi Corporation (NASDAQ:XPER) the right investment to pursue these days? Money managers are reducing their bets on the stock. The number of bullish hedge fund positions retreated by 1 in recent months. Our calculations also showed that xper isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Clint Carlson, Carlson Capital

We’re going to take a look at the fresh hedge fund action encompassing Xperi Corporation (NASDAQ:XPER).

Hedge fund activity in Xperi Corporation (NASDAQ:XPER)

At the end of the fourth quarter, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards XPER over the last 14 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with XPER Positions

Among these funds, Nokomis Capital held the most valuable stake in Xperi Corporation (NASDAQ:XPER), which was worth $29.8 million at the end of the fourth quarter. On the second spot was Trigran Investments which amassed $16.8 million worth of shares. Moreover, D E Shaw, Hawk Ridge Management, and Carlson Capital were also bullish on Xperi Corporation (NASDAQ:XPER), allocating a large percentage of their portfolios to this stock.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Ellington. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 700+ hedge funds tracked by Insider Monkey identified XPER as a viable investment and initiated a position in the stock.

Let’s check out hedge fund activity in other stocks similar to Xperi Corporation (NASDAQ:XPER). We will take a look at Systemax Inc. (NYSE:SYX), Addus Homecare Corporation (NASDAQ:ADUS), AGM Group Holdings Inc. (NASDAQ:AGMH), and Golden Ocean Group Ltd (NASDAQ:GOGL). This group of stocks’ market values match XPER’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SYX 11 26036 -3
ADUS 14 76200 -4
AGMH 1 326 1
GOGL 9 156622 3
Average 8.75 64796 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $65 million. That figure was $108 million in XPER’s case. Addus Homecare Corporation (NASDAQ:ADUS) is the most popular stock in this table. On the other hand AGM Group Holdings Inc. (NASDAQ:AGMH) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Xperi Corporation (NASDAQ:XPER) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on XPER as the stock returned 35.6% and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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

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