The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Advanced Micro Devices, Inc. (NASDAQ:AMD) based on those filings.
Advanced Micro Devices, Inc. (NASDAQ:AMD) investors should pay attention to an increase in enthusiasm from smart money in recent months. AMD was in 62 hedge funds’ portfolios at the end of March. There were 53 hedge funds in our database with AMD positions at the end of the previous quarter. Our calculations also showed that AMD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
At the moment there are many gauges market participants have at their disposal to analyze publicly traded companies. A couple of the less known gauges are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the top fund managers can outclass the S&P 500 by a healthy margin (see the details here).
David E. Shaw of D.E. Shaw
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Europe is set to become the world’s largest cannabis market, so we checked out this European marijuana stock pitch. Also, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this analyst’s “corona catalyst plays“. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to review the key hedge fund action regarding Advanced Micro Devices, Inc. (NASDAQ:AMD).
Hedge fund activity in Advanced Micro Devices, Inc. (NASDAQ:AMD)
Heading into the second quarter of 2020, a total of 62 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in AMD over the last 18 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in Advanced Micro Devices, Inc. (NASDAQ:AMD) was held by Citadel Investment Group, which reported holding $634.9 million worth of stock at the end of September. It was followed by D E Shaw with a $324.5 million position. Other investors bullish on the company included Fisher Asset Management, GQG Partners, and Polar Capital. In terms of the portfolio weights assigned to each position Kadensa Capital allocated the biggest weight to Advanced Micro Devices, Inc. (NASDAQ:AMD), around 16.06% of its 13F portfolio. Tairen Capital is also relatively very bullish on the stock, earmarking 5.5 percent of its 13F equity portfolio to AMD.
As industrywide interest jumped, specific money managers were leading the bulls’ herd. Fisher Asset Management, managed by Ken Fisher, initiated the most valuable position in Advanced Micro Devices, Inc. (NASDAQ:AMD). Fisher Asset Management had $324.4 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $84 million position during the quarter. The other funds with brand new AMD positions are John Hurley’s Cavalry Asset Management, Brandon Haley’s Holocene Advisors, and Scott Bessent’s Key Square Capital Management.
Let’s now review hedge fund activity in other stocks similar to Advanced Micro Devices, Inc. (NASDAQ:AMD). These stocks are Goldman Sachs Group, Inc. (NYSE:GS), U.S. Bancorp (NYSE:USB), Morgan Stanley (NYSE:MS), and Northrop Grumman Corporation (NYSE:NOC). This group of stocks’ market caps are closest to AMD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GS | 74 | 3084948 | -1 |
| USB | 51 | 5625919 | 1 |
| MS | 70 | 3116102 | 10 |
| NOC | 45 | 984213 | 1 |
| Average | 60 | 3202796 | 2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 60 hedge funds with bullish positions and the average amount invested in these stocks was $3203 million. That figure was $2087 million in AMD’s case. Goldman Sachs Group, Inc. (NYSE:GS) is the most popular stock in this table. On the other hand Northrop Grumman Corporation (NYSE:NOC) is the least popular one with only 45 bullish hedge fund positions. Advanced Micro Devices, Inc. (NASDAQ:AMD) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but still beat the market by 15.6 percentage points. Hedge funds were also right about betting on AMD as the stock returned 21.3% in Q2 (through May 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
