Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Valeant and SunEdison, have not done well during the last 12 months due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average. 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 returned only 7.6% during the same period and less than 49% of its constituents managed to beat this return. Because their consensus picks have done well, we pay attention to what elite funds and billionaire investors think before doing extensive research on a stock. In this article, we take a closer look at Citrix Systems, Inc. (NASDAQ:CTXS) from the perspective of those elite funds.
Is Citrix Systems, Inc. (NASDAQ:CTXS) a first-rate investment now? The best stock pickers are reducing their bets on the stock. The number of long hedge fund bets were cut by 7 recently. CTXS was in 38 hedge funds’ portfolios at the end of the third quarter of 2016. There were 45 hedge funds in our database with CTXS holdings at the end of the previous quarter. This may not be a negative indicator if Citrix is still more popular than similarly valued stocks. That’s why at the end of this article we will also compare CTXS to other stocks including Grupo Financero Sntdr Mxco SAB de CV ADR (NYSE:BSMX), Cincinnati Financial Corporation (NASDAQ:CINF), and Ultrapar Participacoes SA (ADR) (NYSE:UGP) 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.
Now, let’s view the new action regarding Citrix Systems, Inc. (NASDAQ:CTXS).
How are hedge funds trading Citrix Systems, Inc. (NASDAQ:CTXS)?
Heading into the fourth quarter of 2016, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, down 16% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Paul Singer’s Elliott Management has the most valuable position in Citrix Systems, Inc. (NASDAQ:CTXS), worth close to $571.5 million and accounting for 4.7% of its total 13F portfolio. On Elliott Management’s heels is AQR Capital Management, managed by Cliff Asness, which holds a $214.3 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining peers that hold long positions encompass Farallon Capital, Brookside Capital and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Because Citrix Systems, Inc. (NASDAQ:CTXS) has witnessed declining sentiment from the entirety of the hedge funds we track, we can see that there is a sect of funds that decided to sell off their full holdings by the end of the third quarter. At the top of the heap, Jason Karp’s Tourbillon Capital Partners sold off the largest stake of the “upper crust” of funds watched by Insider Monkey, comprising close to $94.7 million in call options, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dropped about $6 million worth of options. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 7 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Citrix Systems, Inc. (NASDAQ:CTXS). These stocks are Grupo Financero Sntdr Mxco (NYSE:BSMX), Cincinnati Financial Corporation (NASDAQ:CINF), Ultrapar Participacoes SA (ADR) (NYSE:UGP), and Martin Marietta Materials, Inc. (NYSE:MLM). This group of stocks’ market caps are closest to CTXS’s market cap.
|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 18 hedge funds with bullish positions and the average amount invested in these stocks was $364 million. That figure was approximately $1.43 billion in CTXS’s case. Martin Marietta Materials, Inc. (NYSE:MLM) is the most popular stock in this table. On the other hand Grupo Financero Sntdr Mxco SAB de CV ADR (NYSE:BSMX) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Citrix Systems, Inc. (NASDAQ:CTXS) 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.