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Is Intel Corporation (INTC) Going to Burn These Hedge Funds?

Seeing as Intel Corporation (NASDAQ:INTC) has faced falling interest from the aggregate hedge fund industry, it’s easy to see that there were a few hedge funds who were dropping their entire stakes in the third quarter. Interestingly, Christian Leone’s Luxor Capital Group said goodbye to the biggest stake of all the hedgies followed by Insider Monkey, worth about $46.9 million in stock. Gordy Holterman and Derek Dunn’s fund, Overland Advisors, also sold off its holding, about $40.6 million worth of INTC shares. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds in the third 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 Comcast Corporation (NASDAQ:CMCSA), International Business Machines Corp. (NYSE:IBM), Merck & Co., Inc. (NYSE:MRK), and PepsiCo, Inc. (NYSE:PEP). 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
CMCSA 80 8566242 4
IBM 63 13494699 4
MRK 62 2250136 -12
PEP 57 6739297 0

As you can see these stocks had an average of 66 hedge funds with bullish positions and the average amount invested in these stocks was $7.76 billion. That figure was just $3.67 billion in INTC’s case. Comcast Corporation (NASDAQ:CMCSA) is the most popular stock in this table. On the other hand PepsiCo, Inc. (NYSE:PEP) is the least popular one with only 57 bullish hedge fund positions. Compared to these stocks, Intel Corporation (NASDAQ:INTC) is even less popular than PEP. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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