We at Insider Monkey have gone over 873 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article, we look at what those funds think of Zebra Technologies Corporation (NASDAQ:ZBRA) based on that data.
Zebra Technologies Corporation (NASDAQ:ZBRA) has seen a decrease in hedge fund interest lately. Zebra Technologies Corporation (NASDAQ:ZBRA) was in 34 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 44. Our calculations also showed that ZBRA isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. 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 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
John Rogers of Ariel Investments
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. 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. 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 homepage. Keeping this in mind let’s view the latest hedge fund action surrounding Zebra Technologies Corporation (NASDAQ:ZBRA).
Do Hedge Funds Think ZBRA Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of -3% from one quarter earlier. By comparison, 38 hedge funds held shares or bullish call options in ZBRA a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Zebra Technologies Corporation (NASDAQ:ZBRA) was held by 0, which reported holding $609.5 million worth of stock at the end of June. It was followed by Arrowstreet Capital with a $172.5 million position. Other investors bullish on the company included AQR Capital Management, Goodnow Investment Group, and Ariel Investments. In terms of the portfolio weights assigned to each position Cedar Rock Capital allocated the biggest weight to Zebra Technologies Corporation (NASDAQ:ZBRA), around 13.87% of its 13F portfolio. Makaira Partners is also relatively very bullish on the stock, setting aside 11.33 percent of its 13F equity portfolio to ZBRA.
Since Zebra Technologies Corporation (NASDAQ:ZBRA) has experienced a decline in interest from the smart money, we can see that there were a few money managers that slashed their entire stakes by the end of the second quarter. Intriguingly, Jack Woodruff’s Candlestick Capital Management dumped the largest investment of the “upper crust” of funds tracked by Insider Monkey, valued at an estimated $15.8 million in stock. Lee Ainslie’s fund, Maverick Capital, also cut its stock, about $4.3 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 1 funds by the end of the second quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Zebra Technologies Corporation (NASDAQ:ZBRA) but similarly valued. We will take a look at Verisk Analytics, Inc. (NASDAQ:VRSK), Maxim Integrated Products Inc. (NASDAQ:MXIM), Synchrony Financial (NYSE:SYF), WEC Energy Group, Inc. (NYSE:WEC), American Water Works Company, Inc. (NYSE:AWK), Magna International Inc. (NYSE:MGA), and Yum China Holdings, Inc. (NYSE:YUMC). This group of stocks’ market valuations resemble ZBRA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VRSK | 36 | 1738237 | 2 |
| MXIM | 56 | 4210328 | 1 |
| SYF | 39 | 1541005 | -10 |
| WEC | 27 | 499940 | 10 |
| AWK | 30 | 1076976 | 0 |
| MGA | 39 | 576231 | 5 |
| YUMC | 32 | 913525 | -2 |
| Average | 37 | 1508035 | 0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 37 hedge funds with bullish positions and the average amount invested in these stocks was $1508 million. That figure was $1207 million in ZBRA’s case. Maxim Integrated Products Inc. (NASDAQ:MXIM) is the most popular stock in this table. On the other hand WEC Energy Group, Inc. (NYSE:WEC) is the least popular one with only 27 bullish hedge fund positions. Zebra Technologies Corporation (NASDAQ:ZBRA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ZBRA is 39.3. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 21.8% in 2021 through October 11th and surpassed the market again by 4.4 percentage points. Unfortunately ZBRA wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ZBRA investors were disappointed as the stock returned -6.9% since the end of June (through 10/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Zebra Technologies Corp (NASDAQ:ZBRA)
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Disclosure: None. This article was originally published at Insider Monkey.
