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Hedge Funds Dropped The Ball On Intel Corporation (INTC)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing more than 730 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of June 28th, 2019. In this article we are going to take a look at smart money sentiment towards Intel Corporation (NASDAQ:INTC).

Intel Corporation (NASDAQ:INTC) investors should be aware of a large decrease in hedge fund sentiment in recent months. INTC was in 43 hedge funds’ portfolios at the end of the second quarter of 2019. There were 62 hedge funds in our database with INTC positions at the end of the previous quarter. Our calculations also showed that INTC isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are many metrics stock market investors use to evaluate their holdings. A duo of the most underrated metrics are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the top hedge fund managers can beat the market by a healthy amount (see the details here).

Kerr Neilson

Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a look at the recent hedge fund action encompassing Intel Corporation (NASDAQ:INTC).

What does smart money think about Intel Corporation (NASDAQ:INTC)?

Heading into the third quarter of 2019, a total of 43 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -31% from the previous quarter. By comparison, 62 hedge funds held shares or bullish call options in INTC a year ago. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

No of Hedge Funds with INTC Positions

The largest stake in Intel Corporation (NASDAQ:INTC) was held by Fisher Asset Management, which reported holding $1271.3 million worth of stock at the end of March. It was followed by AQR Capital Management with a $555.9 million position. Other investors bullish on the company included Arrowstreet Capital, D E Shaw, and Platinum Asset Management.

Because Intel Corporation (NASDAQ:INTC) has experienced declining sentiment from hedge fund managers, we can see that there is a sect of funds that decided to sell off their positions entirely in the second quarter. Interestingly, William von Mueffling’s Cantillon Capital Management cut the largest investment of the “upper crust” of funds tracked by Insider Monkey, worth close to $224 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund dumped about $143.5 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 19 funds in the second quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Intel Corporation (NASDAQ:INTC) but similarly valued. These stocks are Wells Fargo & Company (NYSE:WFC), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Novartis AG (NYSE:NVS), and The Boeing Company (NYSE:BA). This group of stocks’ market caps are similar to INTC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WFC 65 25938800 -8
TSM 42 4239857 3
NVS 30 1681993 -3
BA 74 5121698 3
Average 52.75 9245587 -1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 52.75 hedge funds with bullish positions and the average amount invested in these stocks was $9246 million. That figure was $3501 million in INTC’s case. The Boeing Company (NYSE:BA) is the most popular stock in this table. On the other hand Novartis AG (NYSE:NVS) is the least popular one with only 30 bullish hedge fund positions. Intel Corporation (NASDAQ:INTC) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on INTC as the stock returned 8.4% during the same time frame and outperformed the market by an even larger margin.

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

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