There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Synaptics, Incorporated (NASDAQ:SYNA).
Synaptics, Incorporated (NASDAQ:SYNA) investors should pay attention to a decrease in hedge fund sentiment recently. SYNA was in 21 hedge funds’ portfolios at the end of September. There were 24 hedge funds in our database with SYNA holdings at the end of the previous quarter. At the end of this article we will also compare SYNA to other stocks including Minerals Technologies Inc (NYSE:MTX), Sanmina Corp (NASDAQ:SANM), and On Assignment, Inc. (NYSE:ASGN) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
With all of this in mind, let’s check out the latest action regarding Synaptics, Incorporated (NASDAQ:SYNA).
How have hedgies been trading Synaptics, Incorporated (NASDAQ:SYNA)?
Heading into the fourth quarter of 2016, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the second quarter of 2016. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the most valuable position in Synaptics, Incorporated (NASDAQ:SYNA). AQR Capital Management has a $75.4 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Quentec Asset Management, managed by Ken Hahn, which holds a $22.6 million position; the fund has 3.1% of its 13F portfolio invested in the stock. Some other peers with similar optimism encompass Philippe Laffont’s Coatue Management, John Brennan’s Sirios Capital Management and Joel Greenblatt’s Gotham Asset Management.
Seeing as Synaptics, Incorporated (NASDAQ:SYNA) has witnessed falling interest from the smart money, we can see that there was a specific group of fund managers who sold off their positions entirely by the end of the third quarter. It’s worth mentioning that Noam Gottesman’s GLG Partners sold off the largest investment of all the hedgies watched by Insider Monkey, worth an estimated $16.1 million in stock, and Seymour Sy Kaufman and Michael Stark’s Crosslink Capital was right behind this move, as the fund sold off about $14.4 million worth. These moves are important to note, as total hedge fund interest was cut by 3 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Synaptics, Incorporated (NASDAQ:SYNA). We will take a look at Minerals Technologies Inc (NYSE:MTX), Sanmina Corp (NASDAQ:SANM), On Assignment, Inc. (NYSE:ASGN), and Novavax, Inc. (NASDAQ:NVAX). All of these stocks’ market caps resemble SYNA’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $108 million. That figure was $207 million in SYNA’s case. Sanmina Corp (NASDAQ:SANM) is the most popular stock in this table. On the other hand Novavax, Inc. (NASDAQ:NVAX) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Synaptics, Incorporated (NASDAQ:SYNA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.