Should You Avoid Skyworks Solutions Inc (SWKS)?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Skyworks Solutions Inc (NASDAQ:SWKS).

Skyworks Solutions Inc (NASDAQ:SWKS) investors should be aware of a decrease in hedge fund interest recently. SWKS was in 32 hedge funds’ portfolios at the end of September. There were 33 hedge funds in our database with SWKS holdings at the end of the previous quarter. At the end of this article we will also compare SWKS to other stocks including Vodafone Group Plc (ADR) (NASDAQ:VOD), Cabot Oil & Gas Corporation (NYSE:COG), and Agnico-Eagle Mines Limited (USA) (NYSE:AEM) 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 take a peek at the new action surrounding Skyworks Solutions Inc (NASDAQ:SWKS).

Hedge fund activity in Skyworks Solutions Inc (NASDAQ:SWKS)

At the end of the third quarter, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, down by 3% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Platinum Asset Management, managed by Kerr Neilson, holds the number one position in Skyworks Solutions Inc (NASDAQ:SWKS). Platinum Asset Management has a $98.6 million position in the stock, comprising 2.3% of its 13F portfolio. On Platinum Asset Management’s heels is Citadel Investment Group, managed by Ken Griffin, which holds a $73.6 million position. Other professional money managers with similar optimism consist of Steve Cohen’s Point72 Asset Management, and Vivek Mehta and Aaron Husock’s ShearLink Capital.

Because Skyworks Solutions Inc (NASDAQ:SWKS) has faced falling interest from hedge fund managers, logic holds that there lies a certain “tier” of hedge funds who were dropping their entire stakes in the third quarter. Interestingly, John Lykouretzos’ Hoplite Capital Management dropped the biggest position of all the hedgies monitored by Insider Monkey, totaling an estimated $25.1 million in call options. These bearish behaviors are important to note, as total hedge fund interest dropped by 1 fund in the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Skyworks Solutions Inc (NASDAQ:SWKS) but similarly valued. These stocks are Vodafone Group Plc (ADR) (NASDAQ:VOD), Cabot Oil & Gas Corporation (NYSE:COG), Agnico-Eagle Mines Limited (USA) (NYSE:AEM), and Principal Financial Group Inc (NYSE:PFG). This group of stocks’ market valuations are closest to SWKS’s market valuation.

As you can see these stocks had an average of 23.25 hedge funds with bullish positions and the average amount invested in these stocks was $716 million. That figure was $458 million in SWKS’s case. Cabot Oil & Gas Corporation (NYSE:COG) is the most popular stock in this table. On the other hand Principal Financial Group Inc (NYSE:PFG) is the least popular one with only 15 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard COG might be a better candidate to consider a long position.

Disclosure: None