Is Micron Technology, Inc. (NASDAQ:MU) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments. More recently the top 30 mid-cap stocks (market caps between $1 billion and $10 billion) among hedge funds delivered an average return of 18% during the last four quarters (S&P 500 Index funds returned only 7.6% during the same period).
Is Micron Technology, Inc. (NASDAQ:MU) a buy here? Money managers are actually turning bullish. The number of long hedge fund investments swelled by 1 in recent months. There were 67 hedge funds in our database with MU positions at the end of the previous quarter. At the end of this article we will also compare MU to other stocks including NetEase, Inc (ADR) (NASDAQ:NTES), Workday Inc (NYSE:WDAY), and The Progressive Corporation (NYSE:PGR) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Keeping this in mind, let’s take a look at the key action surrounding Micron Technology, Inc. (NASDAQ:MU).
Hedge fund activity in Micron Technology, Inc. (NASDAQ:MU)
At the end of the third quarter, a total of 68 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 1% increase from one quarter earlier. On the other hand, there were a total of 64 hedge funds with a bullish position in MU at the beginning of this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Ken Griffin’s Citadel Investment Group has the number one position in Micron Technology, Inc. (NASDAQ:MU), worth close to $370.9 million. Coming in second is Israel Englander’s Millennium Management which holds a $137.5 million position. Other members of the smart money that hold long positions contain Principal Global Investors’ Columbus Circle Investors, Ross Margolies’ Stelliam Investment Management and William B. Gray’s Orbis Investment Management. We should note that Orbis Investment Management is 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.
Consequently, specific money managers have been driving this bullishness. Rob Citrone’s Discovery Capital Management initiated a $71.1 million position during the quarter. The other funds with brand new MU positions are Ken Heebner’s Capital Growth Management and Christopher James’ Partner Fund Management.
Let’s go over hedge fund activity in other stocks similar to Micron Technology, Inc. (NASDAQ:MU). We will take a look at NetEase, Inc (ADR) (NASDAQ:NTES), Workday Inc (NYSE:WDAY), The Progressive Corporation (NYSE:PGR), and Willis Towers Watson PLC (NASDAQ:WLTW). This group of stocks’ market valuations resemble MU’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 35 hedge funds with bullish positions and the average amount invested in these stocks was $2.15 billion. That figure was $1.87 billion in MU’s case. Willis Towers Watson PLC (NASDAQ:WLTW) is the most popular stock in this table. On the other hand Workday Inc (NYSE:WDAY) is the least popular one with only 29 bullish hedge fund positions. Compared to these stocks Micron Technology, Inc. (NASDAQ:MU) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.