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Xilinx, Inc. (XLNX): Hedge Funds Taking Some Chips Off The Table

In this article you are going to find out whether hedge funds think Xilinx, Inc. (NASDAQ:XLNX) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Xilinx, Inc. (NASDAQ:XLNX) investors should pay attention to a decrease in activity from the world’s largest hedge funds in recent months. XLNX was in 38 hedge funds’ portfolios at the end of March. There were 42 hedge funds in our database with XLNX holdings at the end of the previous quarter. Our calculations also showed that XLNX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

If you’d ask most stock holders, hedge funds are assumed to be underperforming, outdated investment vehicles of years past. While there are more than 8000 funds trading today, Our experts look at the masters of this group, approximately 850 funds. These money managers handle the lion’s share of the hedge fund industry’s total capital, and by watching their best stock picks, Insider Monkey has figured out a number of investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Gil Simon of SoMa Equity Partners

Gil Simon of SoMa Equity Partners

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s review the latest hedge fund action regarding Xilinx, Inc. (NASDAQ:XLNX).

How have hedgies been trading Xilinx, Inc. (NASDAQ:XLNX)?

At Q1’s end, a total of 38 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards XLNX over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Xilinx, Inc. (NASDAQ:XLNX) was held by Matrix Capital Management, which reported holding $172.6 million worth of stock at the end of September. It was followed by SoMa Equity Partners with a $124.7 million position. Other investors bullish on the company included AQR Capital Management, Alkeon Capital Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Bronson Point Partners allocated the biggest weight to Xilinx, Inc. (NASDAQ:XLNX), around 7.68% of its 13F portfolio. SoMa Equity Partners is also relatively very bullish on the stock, designating 7 percent of its 13F equity portfolio to XLNX.

Since Xilinx, Inc. (NASDAQ:XLNX) has witnessed declining sentiment from hedge fund managers, it’s easy to see that there exists a select few hedge funds who sold off their full holdings last quarter. Interestingly, Steve Cohen’s Point72 Asset Management dumped the largest position of the “upper crust” of funds monitored by Insider Monkey, totaling an estimated $128.5 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dropped its stock, about $80.1 million worth. These moves are important to note, as total hedge fund interest was cut by 4 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to Xilinx, Inc. (NASDAQ:XLNX). These stocks are Synopsys, Inc. (NASDAQ:SNPS), Twitter Inc (NYSE:TWTR), Ford Motor Company (NYSE:F), and Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK). All of these stocks’ market caps are closest to XLNX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SNPS 31 725655 -14
TWTR 55 990334 0
F 33 667079 -3
TLK 7 151891 -1
Average 31.5 633740 -4.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.5 hedge funds with bullish positions and the average amount invested in these stocks was $634 million. That figure was $636 million in XLNX’s case. Twitter Inc (NYSE:TWTR) 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 7 bullish hedge fund positions. Xilinx, Inc. (NASDAQ:XLNX) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on XLNX, though not to the same extent, as the stock returned 18.5% during the first two months of the second quarter and outperformed the market as well.

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