Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed in recent years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that certain hedge funds do have great stock picking skills (and we can identify these hedge funds in advance pretty accurately), so let’s take a glance at the smart money sentiment towards Zebra Technologies Corporation (NASDAQ:ZBRA).
Is Zebra Technologies Corporation (NASDAQ:ZBRA) a healthy stock for your portfolio? Prominent investors were in an optimistic mood. The number of bullish hedge fund bets went up by 5 lately. Zebra Technologies Corporation (NASDAQ:ZBRA) was in 39 hedge funds’ portfolios at the end of the third 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 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. With all of this in mind let’s review the latest hedge fund action regarding Zebra Technologies Corporation (NASDAQ:ZBRA).
Thomas Bancroft of Makaira Partners
Do Hedge Funds Think ZBRA Is A Good Stock To Buy Now?
At Q3’s end, a total of 39 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards ZBRA over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Cedar Rock Capital was the largest shareholder of Zebra Technologies Corporation (NASDAQ:ZBRA), with a stake worth $560.1 million reported as of the end of September. Trailing Cedar Rock Capital was Arrowstreet Capital, which amassed a stake valued at $220.1 million. AQR Capital Management, Goodnow Investment Group, and Makaira 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 Cedar Rock Capital allocated the biggest weight to Zebra Technologies Corporation (NASDAQ:ZBRA), around 13.42% of its 13F portfolio. Makaira Partners is also relatively very bullish on the stock, designating 11.75 percent of its 13F equity portfolio to ZBRA.
As one would reasonably expect, key money managers were breaking ground themselves. Holocene Advisors, managed by Brandon Haley, established the largest position in Zebra Technologies Corporation (NASDAQ:ZBRA). Holocene Advisors had $48.1 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also made a $9.6 million investment in the stock during the quarter. The following funds were also among the new ZBRA investors: Paul Tudor Jones’s Tudor Investment Corp, Jinghua Yan’s TwinBeech Capital, and Alec Litowitz and Ross Laser’s Magnetar Capital.
Let’s check out 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 PACCAR Inc (NASDAQ:PCAR), Delta Air Lines, Inc. (NYSE:DAL), Skyworks Solutions Inc (NASDAQ:SWKS), Bill.com Holdings, Inc. (NYSE:BILL), Li Auto Inc. (NASDAQ:LI), Laboratory Corp. of America Holdings (NYSE:LH), and UiPath Inc. (NYSE:PATH). This group of stocks’ market caps resemble ZBRA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PCAR | 26 | 472066 | -2 |
| DAL | 50 | 1217986 | 1 |
| SWKS | 36 | 805593 | -1 |
| BILL | 65 | 4287204 | 12 |
| LI | 20 | 468125 | 0 |
| LH | 58 | 2706360 | 5 |
| PATH | 27 | 3629284 | 27 |
| Average | 40.3 | 1940945 | 6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 40.3 hedge funds with bullish positions and the average amount invested in these stocks was $1941 million. That figure was $1305 million in ZBRA’s case. Bill.com Holdings, Inc. (NYSE:BILL) is the most popular stock in this table. On the other hand Li Auto Inc. (NASDAQ:LI) is the least popular one with only 20 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 57.7. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. A small number of hedge funds were also right about betting on ZBRA as the stock returned 14.2% since the end of the third quarter (through 11/30) and outperformed the market by an even larger margin.
Follow Zebra Technologies Corp (NASDAQ:ZBRA)
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Disclosure: None. This article was originally published at Insider Monkey.
