Hedge Funds Are Dumping QUALCOMM, Incorporated (QCOM)

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards QUALCOMM, Incorporated (NASDAQ:QCOM) to find out whether there were any major changes in hedge funds’ views.

QUALCOMM, Incorporated (NASDAQ:QCOM) investors should pay attention to a decrease in enthusiasm from smart money of late. QUALCOMM, Incorporated (NASDAQ:QCOM) was in 73 hedge funds’ portfolios at the end of March. The all time high for this statistic is 87. Our calculations also showed that QCOM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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John Overdeck of Two Sigma Advisors

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

At the end of the first quarter, a total of 73 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the previous quarter. The graph below displays the number of hedge funds with bullish position in QCOM over the last 23 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.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Griffin’s Citadel Investment Group has the number one call position in QUALCOMM, Incorporated (NASDAQ:QCOM), worth close to $472.4 million, accounting for 0.1% of its total 13F portfolio. On Citadel Investment Group’s heels is David Goel and Paul Ferri of Matrix Capital Management, with a $442.5 million position; the fund has 5.1% of its 13F portfolio invested in the stock. Other peers that hold long positions include Renaissance Technologies, D. E. Shaw’s D E Shaw 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 5.63% of its 13F portfolio. Matrix Capital Management is also relatively very bullish on the stock, earmarking 5.11 percent of its 13F equity portfolio to QCOM.

Seeing as QUALCOMM, Incorporated (NASDAQ:QCOM) has experienced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of fund managers that decided to sell off their entire stakes in the first quarter. It’s worth mentioning that Jacob Mitchell’s Antipodes Partners cut the biggest position of the 750 funds watched by Insider Monkey, worth an estimated $65.1 million in stock. Bijan Modanlou, Joseph Bou-Saba, and Jayaveera Kodali’s fund, Alta Park Capital, also said goodbye to its stock, about $40.9 million worth. These moves are important to note, as total hedge fund interest fell by 12 funds in the first 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 The Boeing Company (NYSE:BA), NextEra Energy, Inc. (NYSE:NEE), United Parcel Service, Inc. (NYSE:UPS), Union Pacific Corporation (NYSE:UNP), The Unilever Group (NYSE:UL), Linde plc (NYSE:LIN), and BHP Group (NYSE:BBL). This group of stocks’ market values resemble QCOM’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 46.7 hedge funds with bullish positions and the average amount invested in these stocks was $2430 million. That figure was $2766 million in QCOM’s case. Union Pacific Corporation (NYSE:UNP) is the most popular stock in this table. On the other hand The Unilever Group (NYSE:UL) is the least popular one with only 20 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 66.4. 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 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately QCOM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on QCOM were disappointed as the stock returned 2% since the end of March (through 6/11) 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.

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

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