Hedge Funds Have Never Been This Bullish On SiTime Corporation (SITM)

In this article you are going to find out whether hedge funds think SiTime Corporation (NASDAQ:SITM) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Is SiTime Corporation (NASDAQ:SITM) a superb investment today? Investors who are in the know were becoming hopeful. The number of bullish hedge fund bets went up by 4 recently. SiTime Corporation (NASDAQ:SITM) was in 21 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SITM isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 17 hedge funds in our database with SITM positions at the end of the second quarter.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind we’re going to take a look at the new hedge fund action surrounding SiTime Corporation (NASDAQ:SITM).

Chuck Royce

Chuck Royce of Royce & Associates

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

At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 24% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SITM over the last 25 quarters. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

The largest stake in SiTime Corporation (NASDAQ:SITM) was held by Trigran Investments, which reported holding $80.4 million worth of stock at the end of September. It was followed by Driehaus Capital with a $75.2 million position. Other investors bullish on the company included Royce & Associates, D E Shaw, and Aubrey Capital Management. In terms of the portfolio weights assigned to each position Trigran Investments allocated the biggest weight to SiTime Corporation (NASDAQ:SITM), around 8.87% of its 13F portfolio. Aubrey Capital Management is also relatively very bullish on the stock, setting aside 5.01 percent of its 13F equity portfolio to SITM.

Consequently, some big names were breaking ground themselves. D E Shaw, managed by D. E. Shaw, initiated the largest position in SiTime Corporation (NASDAQ:SITM). D E Shaw had $16.1 million invested in the company at the end of the quarter. Renaissance Technologies also made a $3.2 million investment in the stock during the quarter. The other funds with new positions in the stock are John Osterweis’s Osterweis Capital Management, Ken Griffin’s Citadel Investment Group, and Mika Toikka’s AlphaCrest Capital Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as SiTime Corporation (NASDAQ:SITM) but similarly valued. We will take a look at BankUnited Inc (NYSE:BKU), Datto Holding Corp. (NYSE:MSP), Recursion Pharmaceuticals Inc. (NASDAQ:RXRX), Schrodinger, Inc. (NASDAQ:SDGR), Artisan Partners Asset Management Inc (NYSE:APAM), Home Bancshares Inc (Conway, AR) (NYSE:HOMB), and Murphy Oil Corporation (NYSE:MUR). This group of stocks’ market values resemble SITM’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BKU 17 97881 4
MSP 11 2894934 -1
RXRX 13 299050 13
SDGR 20 666585 0
APAM 15 210633 -4
HOMB 16 75347 -2
MUR 19 158703 1
Average 15.9 629019 1.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.9 hedge funds with bullish positions and the average amount invested in these stocks was $629 million. That figure was $247 million in SITM’s case. Schrodinger, Inc. (NASDAQ:SDGR) is the most popular stock in this table. On the other hand Datto Holding Corp. (NYSE:MSP) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks SiTime Corporation (NASDAQ:SITM) is more popular among hedge funds. Our overall hedge fund sentiment score for SITM is 89. 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 29.6% in 2021 and managed to beat the market by 3.6 percentage points. Hedge funds were also right about betting on SITM as the stock returned 43.3% since the end of September (through 12/31) 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.