As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Ciena Corporation (NYSE:CIEN).
Ciena Corporation (NYSE:CIEN) has seen a decrease in enthusiasm from smart money lately. Ciena Corporation (NYSE:CIEN) was in 28 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 36. Our calculations also showed that CIEN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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 we’re going to view the latest hedge fund action encompassing Ciena Corporation (NYSE:CIEN).
Kerr Neilson of Platinum Asset Management
Do Hedge Funds Think CIEN Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the previous quarter. On the other hand, there were a total of 29 hedge funds with a bullish position in CIEN a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Alyeska Investment Group was the largest shareholder of Ciena Corporation (NYSE:CIEN), with a stake worth $81.2 million reported as of the end of September. Trailing Alyeska Investment Group was Rima Senvest Management, which amassed a stake valued at $70.3 million. Platinum Asset Management, D E Shaw, and Woodline Partners 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 Boardman Bay Capital Management allocated the biggest weight to Ciena Corporation (NYSE:CIEN), around 6.14% of its 13F portfolio. Breakline Capital is also relatively very bullish on the stock, designating 2.79 percent of its 13F equity portfolio to CIEN.
Judging by the fact that Ciena Corporation (NYSE:CIEN) has witnessed a decline in interest from the smart money, logic holds that there was a specific group of funds who sold off their positions entirely heading into Q4. At the top of the heap, Brandon Haley’s Holocene Advisors sold off the largest position of the 750 funds followed by Insider Monkey, valued at about $58.5 million in stock, and Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management was right behind this move, as the fund dumped about $4.4 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 1 funds heading into Q4.
Let’s go over hedge fund activity in other stocks similar to Ciena Corporation (NYSE:CIEN). We will take a look at Zai Lab Limited (NASDAQ:ZLAB), FirstService Corporation (NASDAQ:FSV), WEX Inc (NYSE:WEX), Gentex Corporation (NASDAQ:GNTX), AptarGroup, Inc. (NYSE:ATR), Cosan S.A. (NYSE:CSAN), and Rexnord Corp (NYSE:RXN). This group of stocks’ market values resemble CIEN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ZLAB | 36 | 860989 | 0 |
| FSV | 14 | 286751 | 1 |
| WEX | 19 | 513228 | -1 |
| GNTX | 27 | 511079 | -7 |
| ATR | 27 | 344498 | 0 |
| CSAN | 5 | 110211 | 0 |
| RXN | 30 | 840383 | 1 |
| Average | 22.6 | 495306 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.6 hedge funds with bullish positions and the average amount invested in these stocks was $495 million. That figure was $387 million in CIEN’s case. Zai Lab Limited (NASDAQ:ZLAB) is the most popular stock in this table. On the other hand Cosan S.A. (NYSE:CSAN) is the least popular one with only 5 bullish hedge fund positions. Ciena Corporation (NYSE:CIEN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CIEN is 64.4. 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 gained 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Hedge funds were also right about betting on CIEN as the stock returned 40.1% since the end of Q3 (through 12/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Ciena Corp (NYSE:CIEN)
Follow Ciena Corp (NYSE:CIEN)
Suggested Articles:
- 11 Best Quantum Computing Stocks To Buy Now
- 10 Best Cybersecurity Stocks To Buy Now
- 10 Best Cryptocurrencies Redditors are Buying
Disclosure: None. This article was originally published at Insider Monkey.
