Between June 25 and October 30th the Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by more than 14 percentage points as investors worried over the possible ramifications of rising interest rates. The hedge funds and institutional investors we track typically invest more in smaller-cap stocks than an average investor, and we have seen data that shows those funds paring back their overall exposure. Those funds cutting positions in small-caps is one reason why volatility has increased. In the following paragraphs, we take a closer look at what hedge funds and prominent investors think of Leidos Holdings Inc (NYSE:LDOS) and see how the stock is affected by the recent hedge fund activity.
Leidos Holdings Inc (NYSE:LDOS) shareholders have witnessed an increase in hedge fund sentiment recently. At the end of this article, we will also compare Leidos Holdings Inc (NYSE:LDOS) to other stocks, including EPR Properties (NYSE:EPR), YY Inc (ADR) (NASDAQ:YY), and Radius Health Inc (NASDAQ:RDUS) to get a better sense of its popularity.
Follow Leidos Holdings Inc. (NYSE:LDOS)
Follow Leidos Holdings Inc. (NYSE:LDOS)
In the 21st century investor’s toolkit, there are a multitude of metrics shareholders employ to analyze stocks. A pair of the most useful metrics are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the top investment managers can outclass their index-focused peers by a solid margin (see the details here).
With all of this in mind, we’re going to take a look at the latest action encompassing Leidos Holdings Inc (NYSE:LDOS).
How have hedgies been trading Leidos Holdings Inc (NYSE:LDOS)?
Heading into Q4, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 4% from the second quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, AQR Capital Management, managed by Cliff Asness, holds the most valuable position in Leidos Holdings Inc (NYSE:LDOS). AQR Capital Management has a $26.2 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is D E Shaw, holding a $19.8 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other peers that hold long positions consist of Israel Englander’s Millennium Management, John Overdeck and David Siegel’s Two Sigma Advisors, and David Harding’s Winton Capital Management.
As aggregate interest increased, key money managers have been driving this bullishness. Hutchin Hill Capital, managed by Neil Chriss, created the biggest position in Leidos Holdings Inc (NYSE:LDOS). Hutchin Hill Capital had $2.7 million invested in the company at the end of the quarter. Israel Englander’s Catapult Capital Management also initiated a $1.6 million position during the quarter. The following funds were also among the new LDOS investors: Phill Gross and Robert Atchinson’s Adage Capital Management, Andy Redleaf’s Whitebox Advisors, and Alec Litowitz and Ross Laser’s Magnetar Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Leidos Holdings Inc (NYSE:LDOS) but similarly valued. We will take a look at EPR Properties (NYSE:EPR), YY Inc (ADR) (NASDAQ:YY), Radius Health Inc (NASDAQ:RDUS), and DCT Industrial Trust Inc. (NYSE:DCT). All of these stocks’ market caps resemble Leidos Holdings Inc (NYSE:LDOS)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EPR | 18 | 184115 | 3 |
| YY | 18 | 147741 | -7 |
| RDUS | 23 | 562792 | 0 |
| DCT | 8 | 130423 | -1 |
As you can see, these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $256 million. That figure was $117 million in Leidos Holdings Inc (NYSE:LDOS)’s case. Radius Health Inc (NASDAQ:RDUS) is the most popular stock in this table. On the other hand, DCT Industrial Trust Inc. (NYSE:DCT) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks, Leidos Holdings Inc (NYSE:LDOS) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
