Hedge Funds Are Dumping Equinix Inc (EQIX)

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 Equinix Inc (NASDAQ:EQIX) in this article.

Equinix Inc (NASDAQ:EQIX) was in 31 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 55. EQIX has experienced a decrease in hedge fund sentiment recently. There were 33 hedge funds in our database with EQIX holdings at the end of June. Our calculations also showed that EQIX 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. Now let’s review the new hedge fund action regarding Equinix Inc (NASDAQ:EQIX).

Paul Tudor Jones of Tudor Investment Corp

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

At Q3’s end, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards EQIX over the last 25 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

More specifically, Impax Asset Management was the largest shareholder of Equinix Inc (NASDAQ:EQIX), with a stake worth $503.3 million reported as of the end of September. Trailing Impax Asset Management was Alkeon Capital Management, which amassed a stake valued at $377.9 million. Adage Capital Management, Citadel Investment Group, and D E Shaw 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 Tensile Capital allocated the biggest weight to Equinix Inc (NASDAQ:EQIX), around 5.89% of its 13F portfolio. 1623 Capital is also relatively very bullish on the stock, earmarking 3.86 percent of its 13F equity portfolio to EQIX.

Judging by the fact that Equinix Inc (NASDAQ:EQIX) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of hedge funds who were dropping their full holdings by the end of the third quarter. At the top of the heap, Robert Joseph Caruso’s Select Equity Group sold off the biggest position of the 750 funds tracked by Insider Monkey, totaling about $74.9 million in stock. Chris Rokos’s fund, Rokos Capital Management, also dumped its stock, about $30.5 million worth. These transactions are important to note, as total hedge fund interest dropped by 2 funds by the end of the third quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Equinix Inc (NASDAQ:EQIX) but similarly valued. These stocks are Becton, Dickinson and Company (NYSE:BDX), Edwards Lifesciences Corporation (NYSE:EW), Vale SA (NYSE:VALE), DoorDash, Inc. (NYSE:DASH), CME Group Inc (NASDAQ:CME), Cigna Corporation (NYSE:CI), and Westpac Banking Corporation (NYSE:WBK). All of these stocks’ market caps resemble EQIX’s market cap.

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As you can see these stocks had an average of 41.6 hedge funds with bullish positions and the average amount invested in these stocks was $2981 million. That figure was $1195 million in EQIX’s case. CME Group Inc (NASDAQ:CME) is the most popular stock in this table. On the other hand Westpac Banking Corporation (NYSE:WBK) is the least popular one with only 6 bullish hedge fund positions. Equinix Inc (NASDAQ:EQIX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EQIX is 41.5. 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 negative signal and 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 28.6% in 2021 through November 30th and surpassed the market again by 5.6 percentage points. Unfortunately EQIX wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); EQIX investors were disappointed as the stock returned 3.2% since the end of September (through 11/30) 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 most of these stocks already outperformed the market in 2021.

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