After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Intel Corporation (NASDAQ:INTC).
Is Intel Corporation (NASDAQ:INTC) a good stock to buy now? INTC investors should be aware of a decrease in enthusiasm from smart money recently. Intel Corporation (NASDAQ:INTC) was in 66 hedge funds’ portfolios at the end of September. The all time high for this statistics is 78. There were 78 hedge funds in our database with INTC holdings at the end of June. Our calculations also showed that INTC isn’t among the 30 most popular stocks among hedge funds (click for Q3 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In the eyes of most market participants, hedge funds are assumed to be worthless, outdated investment tools of the past. While there are more than 8000 funds in operation at the moment, Our researchers hone in on the leaders of this club, approximately 850 funds. It is estimated that this group of investors watch over most of the hedge fund industry’s total capital, and by keeping track of their best investments, Insider Monkey has unsheathed various investment strategies that have historically beaten the broader indices. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets. Tesla’s stock price skyrocketed, yet lithium prices are still below their 2019 highs. So, we are checking out this lithium stock right now. We go through lists like the 15 best blue chip stocks to buy 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. 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 website. Now let’s analyze the new hedge fund action surrounding Intel Corporation (NASDAQ:INTC).
Hedge fund activity in Intel Corporation (NASDAQ:INTC)
At Q3’s end, a total of 66 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -15% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards INTC over the last 21 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Among these funds, Fisher Asset Management held the most valuable stake in Intel Corporation (NASDAQ:INTC), which was worth $1465.5 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $709.3 million worth of shares. AQR Capital Management, Citadel Investment Group, and D E Shaw 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 MFP Investors allocated the biggest weight to Intel Corporation (NASDAQ:INTC), around 20.87% of its 13F portfolio. Boardman Bay Capital Management is also relatively very bullish on the stock, earmarking 7.97 percent of its 13F equity portfolio to INTC.
Due to the fact that Intel Corporation (NASDAQ:INTC) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of hedgies who sold off their entire stakes by the end of the third quarter. Interestingly, Ken Griffin’s Citadel Investment Group sold off the largest investment of all the hedgies tracked by Insider Monkey, totaling about $286.3 million in stock, and Edmond M. Safra’s EMS Capital was right behind this move, as the fund cut about $72.8 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 12 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Intel Corporation (NASDAQ:INTC) but similarly valued. We will take a look at The Coca-Cola Company (NYSE:KO), Comcast Corporation (NASDAQ:CMCSA), Merck & Co., Inc. (NYSE:MRK), Bank of America Corporation (NYSE:BAC), Pfizer Inc. (NYSE:PFE), AT&T Inc. (NYSE:T), and Novartis AG (NYSE:NVS). All of these 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|
View table here if you experience formatting issues.
As you can see these stocks had an average of 64.6 hedge funds with bullish positions and the average amount invested in these stocks was $9734 million. That figure was $4342 million in INTC’s case. Bank of America Corporation (NYSE:BAC) is the most popular stock in this table. On the other hand Novartis AG (NYSE:NVS) is the least popular one with only 25 bullish hedge fund positions. Intel Corporation (NASDAQ:INTC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for INTC is 50.9. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and beat the market again by 16.1 percentage points. Unfortunately INTC wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on INTC were disappointed as the stock returned -7.7% since the end of September (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 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.