In this article we will check out the progression of hedge fund sentiment towards Skyworks Solutions Inc (NASDAQ:SWKS) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is SWKS a good stock to buy? Skyworks Solutions Inc (NASDAQ:SWKS) was in 33 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 50. SWKS investors should be aware of a decrease in enthusiasm from smart money lately. There were 41 hedge funds in our database with SWKS holdings at the end of December. Our calculations also showed that SWKS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Today there are tons of indicators stock market investors put to use to grade stocks. Some of the less utilized indicators are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the top hedge fund managers can outperform the market by a superb margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Kerr Neilson of Platinum Asset Management
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Do Hedge Funds Think SWKS Is A Good Stock To Buy Now?
At the end of March, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SWKS over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Skyworks Solutions Inc (NASDAQ:SWKS) was held by AQR Capital Management, which reported holding $283.8 million worth of stock at the end of December. It was followed by Select Equity Group with a $142.7 million position. Other investors bullish on the company included Platinum Asset Management, Citadel Investment Group, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Thames Capital Management allocated the biggest weight to Skyworks Solutions Inc (NASDAQ:SWKS), around 2.1% of its 13F portfolio. Platinum Asset Management is also relatively very bullish on the stock, earmarking 1.86 percent of its 13F equity portfolio to SWKS.
Due to the fact that Skyworks Solutions Inc (NASDAQ:SWKS) has experienced falling interest from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of funds who were dropping their positions entirely by the end of the first quarter. At the top of the heap, Steve Cohen’s Point72 Asset Management dumped the largest position of all the hedgies monitored by Insider Monkey, totaling close to $43 million in stock. Matthew Hulsizer’s fund, PEAK6 Capital Management, also sold off its stock, about $19.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 8 funds by the end of the first quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Skyworks Solutions Inc (NASDAQ:SWKS) but similarly valued. These stocks are Fortinet Inc (NASDAQ:FTNT), Welltower Inc. (NYSE:WELL), Eversource Energy (NYSE:ES), Sun Life Financial Inc. (NYSE:SLF), State Street Corporation (NYSE:STT), WEC Energy Group, Inc. (NYSE:WEC), and Willis Towers Watson Public Limited Company (NASDAQ:WLTW). All of these stocks’ market caps are similar to SWKS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FTNT | 23 | 906297 | -9 |
| WELL | 21 | 326506 | -5 |
| ES | 24 | 421208 | 0 |
| SLF | 17 | 139250 | -2 |
| STT | 32 | 866316 | 1 |
| WEC | 17 | 184448 | -8 |
| WLTW | 66 | 5189453 | 8 |
| Average | 28.6 | 1147640 | -2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.6 hedge funds with bullish positions and the average amount invested in these stocks was $1148 million. That figure was $766 million in SWKS’s case. Willis Towers Watson Public Limited Company (NASDAQ:WLTW) is the most popular stock in this table. On the other hand Sun Life Financial Inc. (NYSE:SLF) is the least popular one with only 17 bullish hedge fund positions. Skyworks Solutions Inc (NASDAQ:SWKS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SWKS is 33.1. 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 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 gained 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately SWKS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SWKS were disappointed as the stock returned 4.6% since the end of March (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Skyworks Solutions Inc. (NASDAQ:SWKS)
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Disclosure: None. This article was originally published at Insider Monkey.
