Is NXP Semiconductors (NXPI) Stock A Buy or Sell?

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 NXP Semiconductors NV (NASDAQ:NXPI) changed recently.

Is NXPI stock a buy or sell? NXP Semiconductors NV (NASDAQ:NXPI) was in 66 hedge funds’ portfolios at the end of December. The all time high for this statistic is 93. NXPI investors should be aware of a decrease in hedge fund sentiment lately. There were 68 hedge funds in our database with NXPI holdings at the end of September. Our calculations also showed that NXPI isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Alex Sacerdote of Whale Rock Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 best cheap stocks to buy now 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 (or at the end of this article). Keeping this in mind we’re going to take a peek at the new hedge fund action encompassing NXP Semiconductors NV (NASDAQ:NXPI).

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

At Q4’s end, a total of 66 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in NXPI over the last 22 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Alex Sacerdote’s Whale Rock Capital Management has the most valuable position in NXP Semiconductors NV (NASDAQ:NXPI), worth close to $430.4 million, corresponding to 2.9% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $244.1 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish encompass Ken Fisher’s Fisher Asset Management, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC and Steve Cohen’s Point72 Asset Management. In terms of the portfolio weights assigned to each position Engine No. 1 LLC allocated the biggest weight to NXP Semiconductors NV (NASDAQ:NXPI), around 9.93% of its 13F portfolio. Mountain Road Advisors is also relatively very bullish on the stock, dishing out 7.89 percent of its 13F equity portfolio to NXPI.

Seeing as NXP Semiconductors NV (NASDAQ:NXPI) has witnessed a decline in interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of money managers who were dropping their full holdings by the end of the fourth quarter. Interestingly, Zach Schreiber’s Point State Capital dropped the largest position of the “upper crust” of funds tracked by Insider Monkey, valued at an estimated $57 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also dumped its stock, about $56.6 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 2 funds by the end of the fourth quarter.

Let’s check out hedge fund activity in other stocks similar to NXP Semiconductors NV (NASDAQ:NXPI). We will take a look at Peloton Interactive, Inc. (NASDAQ:PTON), Vodafone Group Plc (NASDAQ:VOD), Palantir Technologies Inc. (NYSE:PLTR), Cognizant Technology Solutions Corp (NASDAQ:CTSH), Ross Stores, Inc. (NASDAQ:ROST), Twitter Inc (NYSE:TWTR), and TAL Education Group (NYSE:TAL). This group of stocks’ market values are similar to NXPI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PTON 63 5666462 5
VOD 17 745457 -5
PLTR 38 1902514 7
CTSH 46 3517450 1
ROST 57 1308907 11
TWTR 78 2777387 3
TAL 29 1970456 -12
Average 46.9 2555519 1.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 46.9 hedge funds with bullish positions and the average amount invested in these stocks was $2556 million. That figure was $2260 million in NXPI’s case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand Vodafone Group Plc (NASDAQ:VOD) is the least popular one with only 17 bullish hedge fund positions. NXP Semiconductors NV (NASDAQ:NXPI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NXPI is 64.5. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7% in 2021 through March 12th and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on NXPI as the stock returned 15.7% since the end of Q4 (through 3/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Follow Nxp Semiconductors N.v. (NASDAQ:NXPI)

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