Hedge Funds Have Never Been This Bullish On Calix Inc (CALX)

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Calix Inc (NYSE:CALX) changed recently.

Is Calix Inc (NYSE:CALX) a good investment now? The smart money was betting on the stock. The number of long hedge fund bets went up by 6 in recent months. Calix Inc (NYSE:CALX) was in 31 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 25. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CALX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.


Louis Navellier of Navellier & Associates

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to view the new hedge fund action regarding Calix Inc (NYSE:CALX).

Do Hedge Funds Think CALX Is A Good Stock To Buy Now?

At first quarter’s end, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 24% from the fourth quarter of 2020. By comparison, 15 hedge funds held shares or bullish call options in CALX a year ago. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Renaissance Technologies has the most valuable position in Calix Inc (NYSE:CALX), worth close to $83.2 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Driehaus Capital, led by Richard Driehaus, holding a $59 million position; 0.9% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that hold long positions comprise J. Daniel Plants’s Voce Capital, Mike Masters’s Masters Capital Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Voce Capital allocated the biggest weight to Calix Inc (NYSE:CALX), around 9.71% of its 13F portfolio. G2 Investment Partners Management is also relatively very bullish on the stock, designating 1.84 percent of its 13F equity portfolio to CALX.

As industrywide interest jumped, key hedge funds were breaking ground themselves. Masters Capital Management, managed by Mike Masters, created the most valuable position in Calix Inc (NYSE:CALX). Masters Capital Management had $17.3 million invested in the company at the end of the quarter. George McCabe’s Portolan Capital Management also initiated a $6.6 million position during the quarter. The other funds with new positions in the stock are Rob Citrone’s Discovery Capital Management, Anand Parekh’s Alyeska Investment Group, and Louis Navellier’s Navellier & Associates.

Let’s check out hedge fund activity in other stocks similar to Calix Inc (NYSE:CALX). These stocks are Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), WW International, Inc. (NASDAQ:WW), ON24, Inc. (NYSE:ONTF), Piedmont Office Realty Trust, Inc. (NYSE:PDM), Vector Group Ltd (NYSE:VGR), Edgewell Personal Care Company (NYSE:EPC), and Velodyne Lidar, Inc. (NASDAQ:VLDR). All of these stocks’ market caps are similar to CALX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SBGI 19 396417 -10
WW 28 466061 -4
ONTF 19 117781 19
PDM 13 81180 2
VGR 14 150484 0
EPC 20 235053 0
VLDR 15 43509 -1
Average 18.3 212926 0.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.3 hedge funds with bullish positions and the average amount invested in these stocks was $213 million. That figure was $273 million in CALX’s case. WW International, Inc. (NASDAQ:WW) is the most popular stock in this table. On the other hand Piedmont Office Realty Trust, Inc. (NYSE:PDM) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Calix Inc (NYSE:CALX) is more popular among hedge funds. Our overall hedge fund sentiment score for CALX is 90. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 22.8% in 2021 through July 2nd but still managed to beat the market by 6 percentage points. Hedge funds were also right about betting on CALX as the stock returned 34.4% since the end of March (through 7/2) 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.

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