At Insider Monkey, we pore over the filings of nearly 887 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of December 31st. In this article, we will use that wealth of knowledge to determine whether or not Skyworks Solutions Inc (NASDAQ:SWKS) makes for a good investment right now.
Is SWKS stock a buy or sell? Money managers were getting less bullish. The number of long hedge fund bets fell by 9 lately. Skyworks Solutions Inc (NASDAQ:SWKS) was in 41 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 50. Our calculations also showed that SWKS isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 50 hedge funds in our database with SWKS holdings at the end of September.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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. Keeping this in mind let’s go over the key hedge fund action regarding Skyworks Solutions Inc (NASDAQ:SWKS).
Do Hedge Funds Think SWKS Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 41 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -18% from one quarter earlier. By comparison, 43 hedge funds held shares or bullish call options in SWKS a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, AQR Capital Management was the largest shareholder of Skyworks Solutions Inc (NASDAQ:SWKS), with a stake worth $283.2 million reported as of the end of December. Trailing AQR Capital Management was Platinum Asset Management, which amassed a stake valued at $98.3 million. Select Equity Group, Arrowstreet Capital, and Point72 Asset Management 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 Platinum Asset Management allocated the biggest weight to Skyworks Solutions Inc (NASDAQ:SWKS), around 2.26% of its 13F portfolio. Thames Capital Management is also relatively very bullish on the stock, dishing out 2.13 percent of its 13F equity portfolio to SWKS.
Seeing as Skyworks Solutions Inc (NASDAQ:SWKS) has faced falling interest from the smart money, it’s easy to see that there lies a certain “tier” of hedgies that elected to cut their positions entirely by the end of the fourth quarter. Interestingly, John Hurley’s Cavalry Asset Management cut the biggest stake of the 750 funds tracked by Insider Monkey, totaling an estimated $85.4 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also dumped its stock, about $70.4 million worth. These transactions are important to note, as total hedge fund interest was cut by 9 funds by the end of the fourth quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Skyworks Solutions Inc (NASDAQ:SWKS) but similarly valued. We will take a look at First Republic Bank (NYSE:FRC), Hormel Foods Corporation (NYSE:HRL), D.R. Horton, Inc. (NYSE:DHI), Weyerhaeuser Co. (NYSE:WY), ZTO Express (Cayman) Inc. (NYSE:ZTO), PG&E Corporation (NYSE:PCG), and Verisign, Inc. (NASDAQ:VRSN). This group of 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|
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As you can see these stocks had an average of 42.7 hedge funds with bullish positions and the average amount invested in these stocks was $2547 million. That figure was $764 million in SWKS’s case. PG&E Corporation (NYSE:PCG) is the most popular stock in this table. On the other hand ZTO Express (Cayman) Inc. (NYSE:ZTO) is the least popular one with only 17 bullish hedge fund positions. Skyworks Solutions Inc (NASDAQ:SWKS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SWKS is 45.1. 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. 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 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. A small number of hedge funds were also right about betting on SWKS as the stock returned 15.3% since the end of the fourth quarter (through 3/19) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.