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Do Hedge Funds Love Freescale Semiconductor Ltd (FSL)?

Because Freescale Semiconductor Ltd (NYSE:FSL) has experienced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there was a specific group of money managers who were dropping their positions entirely in the third quarter. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the largest stake of the “upper crust” of funds watched by Insider Monkey, comprising about $81 million in stock, and Clint Carlson’s Carlson Capital was right behind this move, as the fund dropped about $23.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 7 funds in the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Freescale Semiconductor Ltd (NYSE:FSL) but similarly valued. These stocks are TransDigm Group Incorporated (NYSE:TDG), KB Financial Group, Inc. (ADR) (NYSE:KB), Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT), and Whole Foods Market, Inc. (NASDAQ:WFM). All of these stocks’ market caps match FSL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TDG 51 3576295 3
KB 10 22145 3
HOT 47 3609055 -15
WFM 33 427258 1

As you can see these stocks had an average of 35.25 hedge funds with bullish positions and the average amount invested in these stocks was $1909 million. That figure was $506 million in FSL’s case. TransDigm Group Incorporated (NYSE:TDG) is the most popular stock in this table. On the other hand KB Financial Group, Inc. (ADR) (NYSE:KB) is the least popular one with only 10 bullish hedge fund positions. Freescale Semiconductor Ltd (NYSE:FSL) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TDG might be a better candidate to consider a long position.

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