Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Synaptics, Incorporated (NASDAQ:SYNA)? The smart money sentiment can provide an answer to this question.
Is Synaptics, Incorporated (NASDAQ:SYNA) an excellent investment today? Prominent investors are turning less bullish. The number of bullish hedge fund positions were cut by 4 in recent months. SYNA was in 18 hedge funds’ portfolios at the end of September. There were 22 hedge funds in our database with SYNA holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as EnLink Midstream LLC (NYSE:ENLC), ITT Corp (NYSE:ITT), and Methanex Corporation (USA) (NASDAQ:MEOH) to gather more data points.
Keeping this in mind, we’re going to view the latest action encompassing Synaptics, Incorporated (NASDAQ:SYNA).
Hedge fund activity in Synaptics, Incorporated (NASDAQ:SYNA)
At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -18% from the second quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Crosslink Capital, managed by Seymour Sy Kaufman and Michael Stark, holds the number one position in Synaptics, Incorporated (NASDAQ:SYNA). Crosslink Capital has a $36 million position in the stock, comprising 5% of its 13F portfolio. The second largest stake is held by Millennium Management, led by Israel Englander, holding a $16.9 million position; less than 0.1% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Brian Ashford-Russell and Tim Woolley’s Polar Capital, and Jim Simons’ Renaissance Technologies.
Seeing as Synaptics, Incorporated (NASDAQ:SYNA) has witnessed bearish sentiment from the smart money, it’s easy to see that there exists a select few money managers that decided to sell off their positions entirely in the third quarter. It’s worth mentioning that Mark Kingdon’s Kingdon Capital cut the largest stake of the 700 funds tracked by Insider Monkey, comprising about $23.5 million in stock. Amy Minella’s fund, Cardinal Capital, also cut its stock, about $15.5 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 4 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Synaptics, Incorporated (NASDAQ:SYNA) but similarly valued. We will take a look at EnLink Midstream LLC (NYSE:ENLC), ITT Corp (NYSE:ITT), Methanex Corporation (USA) (NASDAQ:MEOH), and Cognex Corporation (NASDAQ:CGNX). This group of stocks’ market values are closest to SYNA’s market value.
|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 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $173 million. That figure was $116 million in SYNA’s case. ITT Corp (NYSE:ITT) is the most popular stock in this table. On the other hand EnLink Midstream LLC (NYSE:ENLC) is the least popular one with only 10 bullish hedge fund positions. Synaptics, Incorporated (NASDAQ:SYNA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ITT might be a better candidate to consider a long position.