We started seeing tectonic shifts in the market during the third quarter. Small-cap stocks underperformed the large-cap stocks by more than 10 percentage points between the end of June 2015 and the end of June 2016. A mean reversion in trends bumped small-cap stocks’ return to almost 9% in Q3, outperforming their large-cap peers by 5 percentage points. The momentum in small-cap space hasn’t subsided during this quarter either. Small-cap stocks beat large-cap stocks by another 5 percentage points during the first 7 weeks of this quarter. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were boosting their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Seagate Technology PLC (NASDAQ:STX).
Seagate Technology PLC (NASDAQ:STX) shareholders have witnessed an increase in hedge fund sentiment of late. STX was in 33 hedge funds’ portfolios at the end of September. There were 23 hedge funds in our database with STX positions at the end of the previous quarter. At the end of this article we will also compare STX to other stocks including AngloGold Ashanti Limited (ADR) (NYSE:AU), Helmerich & Payne, Inc. (NYSE:HP), and Antero Resources Corp (NYSE:AR) to get a better sense of its popularity.
Follow Seagate Technology Holdings Plc (NASDAQ:STX)
Follow Seagate Technology Holdings Plc (NASDAQ:STX)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, we’re going to go over the key action encompassing Seagate Technology PLC (NASDAQ:STX).
What does the smart money think about Seagate Technology PLC (NASDAQ:STX)?
At Q3’s end, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a jump of 43% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Pzena Investment Management, managed by Richard S. Pzena, holds the biggest position in Seagate Technology PLC (NASDAQ:STX). The fund reportedly has a $426.7 million position in the stock, comprising 2.6% of its 13F portfolio. The second largest stake is held by ValueAct Capital, led by Jeffrey Ubben, holding a $367.7 million stake; the fund has 3.2% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions encompass Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group and Jason Karp’s Tourbillon Capital Partners.
As aggregate interest increased, key hedge funds have jumped into Seagate Technology PLC (NASDAQ:STX) headfirst. Millennium Management, run by Israel Englander, initiated the most valuable position in Seagate Technology PLC (NASDAQ:STX). According to its latest 13F filing, the fund had $100.4 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $35.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group, Christopher Lord’s Criterion Capital, and John Hurley’s Cavalry Asset Management.
Let’s go over hedge fund activity in other stocks similar to Seagate Technology PLC (NASDAQ:STX). We will take a look at AngloGold Ashanti Limited (ADR) (NYSE:AU), Helmerich & Payne, Inc. (NYSE:HP), Antero Resources Corp (NYSE:AR), and Comerica Incorporated (NYSE:CMA). This group of stocks’ market caps are similar to STX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AU | 21 | 520074 | -6 |
| HP | 25 | 287195 | 1 |
| AR | 40 | 1577120 | -11 |
| CMA | 41 | 851631 | -1 |
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $809 million. That figure was $1.22 billion in STX’s case. Comerica Incorporated (NYSE:CMA) is the most popular stock in this table. On the other hand AngloGold Ashanti Limited (ADR) (NYSE:AU) is the least popular one with only 21 bullish hedge fund positions. Seagate Technology PLC (NASDAQ:STX) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CMA might be a better candidate to consider a long position.
Disclosure: none.
