A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30th, so let’s proceed with the discussion of the hedge fund sentiment on Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC).
Is Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) a good stock to buy now? The best stock pickers were in a bullish mood. The number of bullish hedge fund bets advanced by 2 recently. Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) was in 21 hedge funds’ portfolios at the end of September. The all time high for this statistic is 25. Our calculations also showed that ERIC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 19 hedge funds in our database with ERIC positions at the end of the second quarter.
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 take a look at the key hedge fund action encompassing Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC).
Fred DiSanto of Ancora Advisors
Do Hedge Funds Think ERIC Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the previous quarter. On the other hand, there were a total of 23 hedge funds with a bullish position in ERIC a year ago. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), which was worth $45.8 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $40.5 million worth of shares. Citadel Investment Group, Cavalry Asset Management, and Point72 Asset Management 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 Cavalry Asset Management allocated the biggest weight to Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), around 2.93% of its 13F portfolio. Mondrian Capital is also relatively very bullish on the stock, earmarking 1.57 percent of its 13F equity portfolio to ERIC.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, created the most outsized position in Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC). Point72 Asset Management had $24.8 million invested in the company at the end of the quarter. Tor Minesuk’s Mondrian Capital also initiated a $4.6 million position during the quarter. The other funds with brand new ERIC positions are Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management and Frederick DiSanto’s Ancora Advisors.
Let’s check out hedge fund activity in other stocks similar to Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC). These stocks are Banco Bradesco SA (NYSE:BBD), Nutrien Ltd. (NYSE:NTR), Hilton Worldwide Holdings Inc (NYSE:HLT), Discover Financial Services (NYSE:DFS), Okta, Inc. (NASDAQ:OKTA), Zscaler, Inc. (NASDAQ:ZS), and Centene Corporation (NYSE:CNC). All of these stocks’ market caps resemble ERIC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BBD | 13 | 228299 | -5 |
| NTR | 30 | 853049 | 2 |
| HLT | 44 | 5364120 | -1 |
| DFS | 37 | 516149 | 0 |
| OKTA | 62 | 2262165 | 5 |
| ZS | 38 | 1624343 | 0 |
| CNC | 50 | 2431144 | 1 |
| Average | 39.1 | 1897038 | 0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 39.1 hedge funds with bullish positions and the average amount invested in these stocks was $1897 million. That figure was $227 million in ERIC’s case. Okta, Inc. (NASDAQ:OKTA) is the most popular stock in this table. On the other hand Banco Bradesco SA (NYSE:BBD) is the least popular one with only 13 bullish hedge fund positions. Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ERIC is 40.4. 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. 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 29.6% in 2021 and surpassed the market again by 3.6 percentage points. Unfortunately ERIC wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ERIC investors were disappointed as the stock returned -2.9% since the end of September (through 12/31) 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 Ericsson L M Telephone Co (NASDAQ:ERIC)
Follow Ericsson L M Telephone Co (NASDAQ:ERIC)
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Disclosure: None. This article was originally published at Insider Monkey.
