The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article we look at what those investors think of Flex Ltd. (NASDAQ:FLEX).
Flex Ltd. (NASDAQ:FLEX) has experienced an increase in support from the world’s most elite money managers in recent months. Flex Ltd. (NASDAQ:FLEX) was in 48 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was 44. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 44 hedge funds in our database with FLEX holdings at the end of December. Our calculations also showed that FLEX isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 115 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.
Scott Ferguson of Sachem Head Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation, which is why we are checking out this inflation play. We go through lists like 10 best gold stocks to buy to identify promising stocks. 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. Keeping this in mind we’re going to take a glance at the fresh hedge fund action surrounding Flex Ltd. (NASDAQ:FLEX).
Do Hedge Funds Think FLEX Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 48 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from one quarter earlier. By comparison, 24 hedge funds held shares or bullish call options in FLEX a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Flex Ltd. (NASDAQ:FLEX) was held by Lyrical Asset Management, which reported holding $299.9 million worth of stock at the end of December. It was followed by Iridian Asset Management with a $250.4 million position. Other investors bullish on the company included Sachem Head Capital, Millennium Management, and Pzena Investment Management. In terms of the portfolio weights assigned to each position Nishkama Capital allocated the biggest weight to Flex Ltd. (NASDAQ:FLEX), around 7.31% of its 13F portfolio. Shelter Haven Capital Management is also relatively very bullish on the stock, earmarking 5.77 percent of its 13F equity portfolio to FLEX.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Southpoint Capital Advisors, managed by John Smith Clark, assembled the most valuable position in Flex Ltd. (NASDAQ:FLEX). Southpoint Capital Advisors had $38.5 million invested in the company at the end of the quarter. Jerry Kochanski’s Shelter Haven Capital Management also initiated a $18.3 million position during the quarter. The following funds were also among the new FLEX investors: Larry Robbins’s Glenview Capital, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Himanshu Gulati’s Antara Capital.
Let’s check out hedge fund activity in other stocks similar to Flex Ltd. (NASDAQ:FLEX). We will take a look at Sensata Technologies Holding plc (NYSE:ST), Neurocrine Biosciences, Inc. (NASDAQ:NBIX), ImmunityBio, Inc. (NASDAQ:IBRX), Axon Enterprise, Inc. (NASDAQ:AXON), Sasol Limited (NYSE:SSL), Kirkland Lake Gold Ltd. (NYSE:KL), and AGNC Investment Corp. (NASDAQ:AGNC). This group of stocks’ market valuations match FLEX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ST | 36 | 1744897 | 1 |
| NBIX | 19 | 882657 | -12 |
| IBRX | 6 | 8021 | 3 |
| AXON | 31 | 410366 | -1 |
| SSL | 7 | 63240 | -3 |
| KL | 25 | 401139 | 1 |
| AGNC | 18 | 167634 | -7 |
| Average | 20.3 | 525422 | -2.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.3 hedge funds with bullish positions and the average amount invested in these stocks was $525 million. That figure was $1636 million in FLEX’s case. Sensata Technologies Holding plc (NYSE:ST) is the most popular stock in this table. On the other hand ImmunityBio, Inc. (NASDAQ:IBRX) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Flex Ltd. (NASDAQ:FLEX) is more popular among hedge funds. Our overall hedge fund sentiment score for FLEX is 89. 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 gained 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. Unfortunately FLEX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FLEX were disappointed as the stock returned -8.1% since the end of the first quarter (through 6/18) 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 since 2019.
Follow Flex Ltd. (NASDAQ:FLEX)
Follow Flex Ltd. (NASDAQ:FLEX)
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Disclosure: None. This article was originally published at Insider Monkey.
