We at Insider Monkey have gone over 867 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of SMART Global Holdings, Inc. (NASDAQ:SGH) based on that data.
Is SMART Global Holdings, Inc. (NASDAQ:SGH) undervalued? Money managers were betting on the stock. The number of long hedge fund bets rose by 1 lately. SMART Global Holdings, Inc. (NASDAQ:SGH) was in 21 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SGH isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 20 hedge funds in our database with SGH positions at the end of the second quarter.
Richard Driehaus of Driehaus Capital
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 view the new hedge fund action regarding SMART Global Holdings, Inc. (NASDAQ:SGH).
Do Hedge Funds Think SGH Is A Good Stock To Buy Now?
At the end of September, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SGH over the last 25 quarters. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Yiheng Capital, managed by Jonathan Guo, holds the number one position in SMART Global Holdings, Inc. (NASDAQ:SGH). Yiheng Capital has a $60.6 million position in the stock, comprising 3% of its 13F portfolio. The second largest stake is held by Crosslink Capital, led by Seymour Sy Kaufman and Michael Stark, holding a $37 million position; 6.7% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish include Richard Driehaus’s Driehaus Capital, Israel Englander’s Millennium Management and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners. In terms of the portfolio weights assigned to each position Crosslink Capital allocated the biggest weight to SMART Global Holdings, Inc. (NASDAQ:SGH), around 6.67% of its 13F portfolio. P.A.W. CAPITAL PARTNERS is also relatively very bullish on the stock, earmarking 3.17 percent of its 13F equity portfolio to SGH.
Consequently, specific money managers were breaking ground themselves. Driehaus Capital, managed by Richard Driehaus, assembled the most valuable position in SMART Global Holdings, Inc. (NASDAQ:SGH). Driehaus Capital had $12.5 million invested in the company at the end of the quarter. Renaissance Technologies also made a $6.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter A. Wright’s P.A.W. CAPITAL PARTNERS, Karim Abbadi and Edward McBride’s Centiva Capital, and Noam Gottesman’s GLG Partners.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as SMART Global Holdings, Inc. (NASDAQ:SGH) but similarly valued. These stocks are National HealthCare Corporation (NYSE:NHC), Arcos Dorados Holding Inc (NYSE:ARCO), IAMGOLD Corporation (NYSE:IAG), Absci Corporation (NASDAQ:ABSI), NANO-X IMAGING LTD (NASDAQ:NNOX), Sight Sciences Inc. (NASDAQ:SGHT), and National Research Corporation (NASDAQ:NRC). This group of stocks’ market valuations are closest to SGH’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NHC | 8 | 54048 | -5 |
| ARCO | 8 | 33178 | -2 |
| IAG | 18 | 72774 | -1 |
| ABSI | 12 | 250823 | 12 |
| NNOX | 9 | 19472 | -2 |
| SGHT | 13 | 202189 | 13 |
| NRC | 10 | 27220 | 1 |
| Average | 11.1 | 94243 | 2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.1 hedge funds with bullish positions and the average amount invested in these stocks was $94 million. That figure was $155 million in SGH’s case. IAMGOLD Corporation (NYSE:IAG) is the most popular stock in this table. On the other hand National HealthCare Corporation (NYSE:NHC) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks SMART Global Holdings, Inc. (NASDAQ:SGH) is more popular among hedge funds. Our overall hedge fund sentiment score for SGH is 86. 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 returned 29.6% in 2021 and managed to beat the market by 3.6 percentage points. Hedge funds were also right about betting on SGH as the stock returned 59.5% since the end of September (through 12/31) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
