Hedge Funds Are Cashing Out Of Xperi Holding Corporation (XPER)

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Xperi Holding Corporation (NASDAQ:XPER).

Xperi Holding Corporation (NASDAQ:XPER) was in 20 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 23. XPER investors should pay attention to a decrease in support from the world’s most elite money managers of late. There were 21 hedge funds in our database with XPER holdings at the end of March. Our calculations also showed that XPER isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Ryan Tolkin, CIO of Schonfeld Strategic Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, plant based food market is expected to explode 100-fold by 2050, so we are checking out this under-the radar stock. We go through lists like the 10 best growth stocks to buy 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. Now we’re going to take a peek at the latest hedge fund action encompassing Xperi Holding Corporation (NASDAQ:XPER).

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

At the end of the second quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the previous quarter. The graph below displays the number of hedge funds with bullish position in XPER over the last 24 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, 0 held the most valuable stake in Xperi Holding Corporation (NASDAQ:XPER), which was worth $48.9 million at the end of the second quarter. On the second spot was Renaissance Technologies which amassed $47.8 million worth of shares. Clearline Capital, Nokomis Capital, and Greenhouse Funds 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 Nokomis Capital allocated the biggest weight to Xperi Holding Corporation (NASDAQ:XPER), around 5.49% of its 13F portfolio. Harvey Partners is also relatively very bullish on the stock, dishing out 3.47 percent of its 13F equity portfolio to XPER.

Due to the fact that Xperi Holding Corporation (NASDAQ:XPER) has witnessed bearish sentiment from the aggregate hedge fund industry, we can see that there exists a select few fund managers that slashed their full holdings by the end of the second quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the biggest stake of the “upper crust” of funds tracked by Insider Monkey, worth close to $10.3 million in stock. Greg Eisner’s fund, Engineers Gate Manager, also said goodbye to its stock, about $1.6 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 1 funds by the end of the second quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Xperi Holding Corporation (NASDAQ:XPER) but similarly valued. These stocks are Revolution Medicines, Inc. (NASDAQ:RVMD), Trinseo PLC (NYSE:TSE), Plains GP Holdings LP (NASDAQ:PAGP), Industrias Bachoco, S.A.B. de C.V. (NYSE:IBA), XPEL Inc. (NASDAQ:XPEL), Washington Federal Inc. (NASDAQ:WAFD), and First Financial Bancorp (NASDAQ:FFBC). This group of stocks’ market caps resemble XPER’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.7 hedge funds with bullish positions and the average amount invested in these stocks was $134 million. That figure was $150 million in XPER’s case. Revolution Medicines, Inc. (NASDAQ:RVMD) is the most popular stock in this table. On the other hand Industrias Bachoco, S.A.B. de C.V. (NYSE:IBA) is the least popular one with only 2 bullish hedge fund positions. Xperi Holding Corporation (NASDAQ:XPER) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for XPER is 63.4. 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 positive signal but 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 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately XPER wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on XPER were disappointed as the stock returned -18.1% since the end of June (through 10/22) 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 many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.