Xperi Holding Corporation (XPER): Hedge Funds Are Going Back and Forth

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Xperi Holding Corporation (NASDAQ:XPER) based on that data and determine whether they were really smart about the stock.

Xperi Holding Corporation (NASDAQ:XPER) investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. Xperi Holding Corporation (NASDAQ:XPER) was in 22 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 23. There were 20 hedge funds in our database with XPER positions at the end of the first quarter. Our calculations also showed that XPER isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Thomas Sandell

Tom Sandell of Sandell Asset Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this lithium company which could also benefit from the electric car adoption. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Now we’re going to view the latest hedge fund action encompassing Xperi Holding Corporation (NASDAQ:XPER).

Hedge fund activity in Xperi Holding Corporation (NASDAQ:XPER)

At the end of June, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from one quarter earlier. By comparison, 21 hedge funds held shares or bullish call options in XPER a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Renaissance Technologies held the most valuable stake in Xperi Holding Corporation (NASDAQ:XPER), which was worth $52.2 million at the end of the third quarter. On the second spot was Clearline Capital which amassed $25.1 million worth of shares. D E Shaw, Arrowstreet Capital, and Sandell Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Clearline Capital allocated the biggest weight to Xperi Holding Corporation (NASDAQ:XPER), around 8.17% of its 13F portfolio. Harvey Partners is also relatively very bullish on the stock, setting aside 5.69 percent of its 13F equity portfolio to XPER.

As industrywide interest jumped, specific money managers have been driving this bullishness. Renaissance Technologies, assembled the most valuable position in Xperi Holding Corporation (NASDAQ:XPER). Renaissance Technologies had $52.2 million invested in the company at the end of the quarter. Marc Majzner’s Clearline Capital also made a $25.1 million investment in the stock during the quarter. The other funds with brand new XPER positions are D. E. Shaw’s D E Shaw, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Tom Sandell’s Sandell Asset Management.

Let’s now take a look at hedge fund activity in other stocks similar to Xperi Holding Corporation (NASDAQ:XPER). We will take a look at Glaukos Corporation (NYSE:GKOS), Edgewell Personal Care Company (NYSE:EPC), Fluor Corporation (NYSE:FLR), Korn Ferry (NYSE:KFY), Heartland Express, Inc. (NASDAQ:HTLD), Phoenix Tree Holdings Limited (NYSE:DNK), and BMC Stock Holdings, Inc. (NASDAQ:BMCH). This group of stocks’ market valuations resemble XPER’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GKOS 18 184439 3
EPC 20 209272 -5
FLR 20 102139 -4
KFY 28 167753 8
HTLD 13 46345 2
DNK 3 22665 0
BMCH 26 307670 3
Average 18.3 148612 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.3 hedge funds with bullish positions and the average amount invested in these stocks was $149 million. That figure was $144 million in XPER’s case. Korn Ferry (NYSE:KFY) is the most popular stock in this table. On the other hand Phoenix Tree Holdings Limited (NYSE:DNK) is the least popular one with only 3 bullish hedge fund positions. Xperi Holding Corporation (NASDAQ:XPER) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for XPER is 73.7. 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 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. Unfortunately XPER wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on XPER were disappointed as the stock returned -21.9% in Q3 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 so far this year.

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