Hedge Funds Are Cashing Out Of QUALCOMM, Incorporated (QCOM)

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about QUALCOMM, Incorporated (NASDAQ:QCOM) in this article.

QUALCOMM, Incorporated (NASDAQ:QCOM) investors should be aware of a decrease in activity from the world’s largest hedge funds in recent months. QUALCOMM, Incorporated (NASDAQ:QCOM) was in 70 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 87. There were 72 hedge funds in our database with QCOM positions at the end of the second quarter. Our calculations also showed that QCOM 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. Keeping this in mind we’re going to view the recent hedge fund action regarding QUALCOMM, Incorporated (NASDAQ:QCOM).

David Siegel of Two Sigma Advisors

Do Hedge Funds Think QCOM Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 70 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from one quarter earlier. On the other hand, there were a total of 87 hedge funds with a bullish position in QCOM a year ago. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Citadel Investment Group, managed by Ken Griffin, holds the number one position in QUALCOMM, Incorporated (NASDAQ:QCOM). Citadel Investment Group has a $501 million call position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Renaissance Technologies, holding a $462.1 million position; 0.6% of its 13F portfolio is allocated to the stock. Other members of the smart money with similar optimism consist of D. E. Shaw’s D E Shaw, David Goel and Paul Ferri’s Matrix Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Bronson Point Partners allocated the biggest weight to QUALCOMM, Incorporated (NASDAQ:QCOM), around 5.07% of its 13F portfolio. Matrix Capital Management is also relatively very bullish on the stock, setting aside 4.9 percent of its 13F equity portfolio to QCOM.

Seeing as QUALCOMM, Incorporated (NASDAQ:QCOM) has witnessed falling interest from hedge fund managers, we can see that there was a specific group of funds who were dropping their positions entirely by the end of the third quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the biggest investment of all the hedgies monitored by Insider Monkey, worth about $77.3 million in stock, and Doug Silverman and Alexander Klabin’s Senator Investment Group was right behind this move, as the fund sold off about $49.3 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 2 funds by the end of the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as QUALCOMM, Incorporated (NASDAQ:QCOM) but similarly valued. These stocks are Citigroup Inc. (NYSE:C), Royal Bank of Canada (NYSE:RY), Lowe’s Companies, Inc. (NYSE:LOW), Unilever PLC (NYSE:UL), The Charles Schwab Corporation (NYSE:SCHW), Sony Group Corp (NYSE:SONY), and BHP Group (NYSE:BHP). This group of stocks’ market values are closest to QCOM’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 38.3 hedge funds with bullish positions and the average amount invested in these stocks was $2645 million. That figure was $3520 million in QCOM’s case. Citigroup Inc. (NYSE:C) is the most popular stock in this table. On the other hand Royal Bank of Canada (NYSE:RY) is the least popular one with only 16 bullish hedge fund positions. QUALCOMM, Incorporated (NASDAQ:QCOM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for QCOM is 70. 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. Hedge funds were also right about betting on QCOM as the stock returned 40% since the end of Q3 (through 11/30) 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.