The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Cirrus Logic, Inc. (NASDAQ:CRUS) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Cirrus Logic, Inc. (NASDAQ:CRUS) was in 33 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 33. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. CRUS shareholders have witnessed an increase in hedge fund sentiment recently. There were 28 hedge funds in our database with CRUS holdings at the end of March. Our calculations also showed that CRUS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are a multitude of gauges investors can use to value publicly traded companies. A duo of the most useful gauges are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the elite investment managers can beat the broader indices by a significant margin (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. Cannabis stocks are roaring back in 2020, which is why we are also checking out this under-the-radar stock. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to take a gander at the latest hedge fund action encompassing Cirrus Logic, Inc. (NASDAQ:CRUS).
What does smart money think about Cirrus Logic, Inc. (NASDAQ:CRUS)?
At the end of June, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from one quarter earlier. On the other hand, there were a total of 23 hedge funds with a bullish position in CRUS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, AQR Capital Management held the most valuable stake in Cirrus Logic, Inc. (NASDAQ:CRUS), which was worth $60.3 million at the end of the third quarter. On the second spot was Royce & Associates which amassed $48.2 million worth of shares. Renaissance Technologies, Millennium Management, and Arrowstreet Capital 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 Woodline Partners allocated the biggest weight to Cirrus Logic, Inc. (NASDAQ:CRUS), around 0.83% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, earmarking 0.53 percent of its 13F equity portfolio to CRUS.
As industrywide interest jumped, key hedge funds have jumped into Cirrus Logic, Inc. (NASDAQ:CRUS) headfirst. Woodline Partners, managed by Michael Rockefeller and KarláKroeker, assembled the most outsized position in Cirrus Logic, Inc. (NASDAQ:CRUS). Woodline Partners had $21 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $8.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, and Peter Muller’s PDT Partners.
Let’s also examine hedge fund activity in other stocks similar to Cirrus Logic, Inc. (NASDAQ:CRUS). We will take a look at Silgan Holdings Inc. (NASDAQ:SLGN), Spirit Realty Capital Inc (NYSE:SRC), United Bankshares, Inc. (NASDAQ:UBSI), Equitrans Midstream Corporation (NYSE:ETRN), Valvoline Inc. (NYSE:VVV), WPX Energy Inc (NYSE:WPX), and Terreno Realty Corporation (NYSE:TRNO). This group of stocks’ market values are closest to CRUS’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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 $249 million. That figure was $316 million in CRUS’s case. Valvoline Inc. (NYSE:VVV) is the most popular stock in this table. On the other hand Terreno Realty Corporation (NYSE:TRNO) is the least popular one with only 9 bullish hedge fund positions. Cirrus Logic, Inc. (NASDAQ:CRUS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CRUS is 78.7. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 33% in 2020 through the end of August and beat the market by 23.2 percentage points. Unfortunately CRUS wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on CRUS were disappointed as the stock returned -1.9% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.