Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Calix Inc (NYSE:CALX) in this article.
Is Calix Inc (NYSE:CALX) a first-rate investment now? Investors who are in the know were getting more optimistic. The number of bullish hedge fund positions rose by 2 in recent months. Calix Inc (NYSE:CALX) was in 25 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 31. Our calculations also showed that CALX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 23 hedge funds in our database with CALX holdings at the end of June.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s view the recent hedge fund action surrounding Calix Inc (NYSE:CALX).
Brad Farber of Atika Capital
Do Hedge Funds Think CALX Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CALX over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Driehaus Capital was the largest shareholder of Calix Inc (NYSE:CALX), with a stake worth $100.4 million reported as of the end of September. Trailing Driehaus Capital was Renaissance Technologies, which amassed a stake valued at $85.4 million. Royce & Associates, G2 Investment Partners Management, and Alyeska Investment Group 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 Voce Capital allocated the biggest weight to Calix Inc (NYSE:CALX), around 4.17% of its 13F portfolio. G2 Investment Partners Management is also relatively very bullish on the stock, designating 3.73 percent of its 13F equity portfolio to CALX.
Consequently, key money managers were breaking ground themselves. Royce & Associates, managed by Chuck Royce, established the most valuable position in Calix Inc (NYSE:CALX). Royce & Associates had $23.8 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $19.2 million investment in the stock during the quarter. The other funds with brand new CALX positions are Brad Farber’s Atika Capital, Doron Breen and Mori Arkin’s Sphera Global Healthcare Fund, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s now take a look at hedge fund activity in other stocks similar to Calix Inc (NYSE:CALX). We will take a look at Stem Inc (NYSE:STEM), Instructure Holdings, Inc. (NYSE:INST), Embraer SA (NYSE:ERJ), Trupanion Inc (NASDAQ:TRUP), SEMrush Holdings, Inc. (NYSE:SEMR), TAL Education Group (NYSE:TAL), and SSR Mining Inc. (NASDAQ:SSRM). All of these stocks’ market caps are similar to CALX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| STEM | 19 | 154092 | -10 |
| INST | 11 | 162506 | 11 |
| ERJ | 14 | 168911 | 3 |
| TRUP | 16 | 259171 | 2 |
| SEMR | 10 | 132260 | 3 |
| TAL | 16 | 201150 | -11 |
| SSRM | 18 | 182175 | -2 |
| Average | 14.9 | 180038 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.9 hedge funds with bullish positions and the average amount invested in these stocks was $180 million. That figure was $333 million in CALX’s case. Stem Inc (NYSE:STEM) is the most popular stock in this table. On the other hand SEMrush Holdings, Inc. (NYSE:SEMR) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Calix Inc (NYSE:CALX) is more popular among hedge funds. Our overall hedge fund sentiment score for CALX is 81.2. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 31.1% in 2021 through December 9th but still managed to beat the market by 5.1 percentage points. Hedge funds were also right about betting on CALX as the stock returned 36.5% since the end of September (through 12/9) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
