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Two Trending Stocks Moving in Different Directions; Which One Hedge Funds Like More?

In Friday intraday trading, two stocks have been trending as they moved in opposite directions as large volumes of shares changed hands. One of them, Texas Instruments Incorporated (NASDAQ:TXN), had started the session in the red, but managed to recoup the losses and has inched up by 0.8% so far. On the other hand, AK Steel Holding Corp (NYSE:AKS) opened several percent higher, but then retracted and currently stands at around 0.2% in green. Both stocks have been affected by the news regarding the companies they represent and in this article we will take a look at both of them. In addition, we will see what hedge funds sentiment can tell about the companies and whether they are worth your attention.

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We pay attention to the hedge fund sentiment, because we are convinced that they are the perfect investors to emulate. We base this belief on extensive studies that covered the period between 1999 and 2012, which showed that a particular segment of hedge funds’ investments is actually worth following. We are talking about hedge funds’ small-cap ideas, which in backtests showed a return of almost one percentage point above the market. Our small-cap strategy focuses on identifying 15 most popular small-cap stocks among hedge funds, and it has returned 118% since August 2012, outperforming the market by around 60 percentage points (see more details here).

With this in mind, let’s take a closer look at Texas Instruments Incorporated (NASDAQ:TXN), which designs and makes semiconductors that it sells to electronics manufacturers. Earlier today, the company announced plans to raise its quarterly dividend by 12% and to add $7.5 billion to its share buyback program even if it had $1.8 billion remaining under the previous buyback authorization at the end of June. Texas Instruments (NASDAQ:TXN) also declared that, on November 16, stockholders of record on October 30, will be paid a dividend of $0.38 per share, up from $0.30 before.

At the end of the second quarter, the number of hedge funds holding stakes in Texas Instruments Incorporated (NASDAQ:TXN) dropped to 33 from 38 a quarter earlier, while the aggregate value of their holdings declined to $532.51 million, equivalent to 1% of the company, from $634.92 million, impacted by a 9% decline of the stock during the quarter. According to our database, Cliff Asness‘ AQR Capital Management holds the largest position in Texas Instruments, with 2.07 million shares worth $106.71 million as of the end of June. Phill Gross and Robert Atchinson’s Adage Capital Management trails AQR with a $69.03 million position that contains 1.34 million shares. Joel Greenblatt’s Gotham Asset Management is the third-largest shareholder, which owns 1.08 million shares valued at $55.62 million.

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