The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Semtech Corporation (NASDAQ:SMTC)?
Semtech Corporation (NASDAQ:SMTC) has experienced an increase in enthusiasm from smart money in recent months. Our calculations also showed that SMTC 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.
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 58 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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Matthew Hulsizer of PEAK6 Capital
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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. Now let’s check out the latest hedge fund action regarding Semtech Corporation (NASDAQ:SMTC).
What have hedge funds been doing with Semtech Corporation (NASDAQ:SMTC)?
At the end of the first quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 42% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards SMTC over the last 18 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
Among these funds, Fisher Asset Management held the most valuable stake in Semtech Corporation (NASDAQ:SMTC), which was worth $52.1 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $15.6 million worth of shares. Renaissance Technologies, AQR Capital Management, 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 Woodline Partners allocated the biggest weight to Semtech Corporation (NASDAQ:SMTC), around 0.67% of its 13F portfolio. Neo Ivy Capital is also relatively very bullish on the stock, dishing out 0.52 percent of its 13F equity portfolio to SMTC.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, established the largest position in Semtech Corporation (NASDAQ:SMTC). Citadel Investment Group had $15.6 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $8.6 million investment in the stock during the quarter. The other funds with brand new SMTC positions are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Matthew Hulsizer’s PEAK6 Capital Management, and Brandon Haley’s Holocene Advisors.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Semtech Corporation (NASDAQ:SMTC) but similarly valued. We will take a look at EQM Midstream Partners, LP (NYSE:EQM), The Timken Company (NYSE:TKR), Shenandoah Telecommunications Company (NASDAQ:SHEN), and Toll Brothers Inc (NYSE:TOL). This group of stocks’ market values are similar to SMTC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EQM | 6 | 15334 | -5 |
| TKR | 30 | 262596 | -10 |
| SHEN | 11 | 97332 | 1 |
| TOL | 20 | 238559 | -11 |
| Average | 16.75 | 153455 | -6.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $153 million. That figure was $146 million in SMTC’s case. The Timken Company (NYSE:TKR) is the most popular stock in this table. On the other hand EQM Midstream Partners, LP (NYSE:EQM) is the least popular one with only 6 bullish hedge fund positions. Semtech Corporation (NASDAQ:SMTC) 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 13.4% in 2020 through June 22nd but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on SMTC as the stock returned 37.7% in Q2 (through June 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
