Was The Smart Money Right About Piling Into Maxim Integrated Products (MXIM)?

We at Insider Monkey have gone over 887 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article, we look at what those funds think of Maxim Integrated Products Inc. (NASDAQ:MXIM) based on that data.

Maxim Integrated Products Inc. (NASDAQ:MXIM) has seen an increase in support from the world’s most elite money managers recently. Maxim Integrated Products Inc. (NASDAQ:MXIM) was in 54 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic was previously 52. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 52 hedge funds in our database with MXIM positions at the end of the third quarter. Our calculations also showed that MXIM isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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Matthew Halbower Pentwater Capital

Matthew Halbower of Pentwater Capital

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Do Hedge Funds Think MXIM Is A Good Stock To Buy Now?

At Q4’s end, a total of 54 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from one quarter earlier. By comparison, 32 hedge funds held shares or bullish call options in MXIM a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Maxim Integrated Products Inc. (NASDAQ:MXIM) was held by Pentwater Capital Management, which reported holding $797.9 million worth of stock at the end of December. It was followed by Millennium Management with a $245.1 million position. Other investors bullish on the company included D E Shaw, Alpine Associates, and Balyasny Asset Management. In terms of the portfolio weights assigned to each position Havens Advisors allocated the biggest weight to Maxim Integrated Products Inc. (NASDAQ:MXIM), around 9.74% of its 13F portfolio. Pentwater Capital Management is also relatively very bullish on the stock, earmarking 9.64 percent of its 13F equity portfolio to MXIM.

With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Berry Street Capital, managed by Orkun Kilic, assembled the biggest position in Maxim Integrated Products Inc. (NASDAQ:MXIM). Berry Street Capital had $19.1 million invested in the company at the end of the quarter. Michael Hintze’s CQS Cayman LP also initiated a $12 million position during the quarter. The following funds were also among the new MXIM investors: Andrew Sandler’s Sandler Capital Management, Wayne Yu’s BCK Capital, and Andrew Weiss’s Weiss Asset Management.

Let’s check out hedge fund activity in other stocks similar to Maxim Integrated Products Inc. (NASDAQ:MXIM). We will take a look at Rogers Communications Inc. (NYSE:RCI), Tyson Foods, Inc. (NYSE:TSN), DTE Energy Company (NYSE:DTE), Equifax Inc. (NYSE:EFX), Cloudflare, Inc. (NYSE:NET), Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK), and Lennar Corporation (NYSE:LEN). This group of stocks’ market valuations match MXIM’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RCI 15 279915 0
TSN 38 867498 2
DTE 29 309932 1
EFX 36 2262542 -6
NET 60 1182477 16
TLK 4 173765 -4
LEN 52 1529604 -8
Average 33.4 943676 0.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 33.4 hedge funds with bullish positions and the average amount invested in these stocks was $944 million. That figure was $2844 million in MXIM’s case. Cloudflare, Inc. (NYSE:NET) is the most popular stock in this table. On the other hand Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) is the least popular one with only 4 bullish hedge fund positions. Maxim Integrated Products Inc. (NASDAQ:MXIM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MXIM is 81.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 90.7% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 35 percentage points. These stocks gained 13.6% in 2021 through April 30th and beat the market again by 1.6 percentage points. Unfortunately MXIM wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on MXIM were disappointed as the stock returned 6% since the end of December (through 4/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.