We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. 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 835 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 December 31st. In this article we look at what those investors think of Synaptics Incorporated (NASDAQ:SYNA).
Is Synaptics Incorporated (NASDAQ:SYNA) a sound investment right now? Prominent investors are taking an optimistic view. The number of bullish hedge fund positions increased by 5 recently. Our calculations also showed that SYNA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
In the 21st century investor’s toolkit there are a lot of methods investors put to use to analyze their holdings. Two of the most useful methods are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the top hedge fund managers can outpace the S&P 500 by a solid amount (see the details here).
Lee Ainslie of Maverick Capital
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s go over the recent hedge fund action encompassing Synaptics Incorporated (NASDAQ:SYNA).
What have hedge funds been doing with Synaptics Incorporated (NASDAQ:SYNA)?
Heading into the first quarter of 2020, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 24% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SYNA over the last 18 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
The largest stake in Synaptics Incorporated (NASDAQ:SYNA) was held by Lynrock Lake, which reported holding $132.5 million worth of stock at the end of September. It was followed by Fisher Asset Management with a $107.6 million position. Other investors bullish on the company included Renaissance Technologies, D E Shaw, and Maverick Capital. In terms of the portfolio weights assigned to each position Lynrock Lake allocated the biggest weight to Synaptics Incorporated (NASDAQ:SYNA), around 13.53% of its 13F portfolio. Maverick Capital is also relatively very bullish on the stock, earmarking 0.58 percent of its 13F equity portfolio to SYNA.
Consequently, some big names were leading the bulls’ herd. Maverick Capital, managed by Lee Ainslie, established the largest position in Synaptics Incorporated (NASDAQ:SYNA). Maverick Capital had $39.9 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $1.5 million investment in the stock during the quarter. The other funds with brand new SYNA positions are Donald Sussman’s Paloma Partners, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, and Frank Slattery’s Symmetry Peak Management.
Let’s go over hedge fund activity in other stocks similar to Synaptics Incorporated (NASDAQ:SYNA). These stocks are AMC Networks Inc (NASDAQ:AMCX), Beacon Roofing Supply, Inc. (NASDAQ:BECN), Bed Bath & Beyond Inc. (NASDAQ:BBBY), and Norbord Inc. (NYSE:OSB). This group of stocks’ market valuations match SYNA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMCX | 25 | 231649 | 1 |
| BECN | 22 | 346853 | -1 |
| BBBY | 34 | 484497 | 7 |
| OSB | 16 | 51708 | 9 |
| Average | 24.25 | 278677 | 4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.25 hedge funds with bullish positions and the average amount invested in these stocks was $279 million. That figure was $487 million in SYNA’s case. Bed Bath & Beyond Inc. (NASDAQ:BBBY) is the most popular stock in this table. On the other hand Norbord Inc. (NYSE:OSB) is the least popular one with only 16 bullish hedge fund positions. Synaptics Incorporated (NASDAQ:SYNA) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 13.0% in 2020 through April 6th but still beat the market by 4.2 percentage points. Hedge funds were also right about betting on SYNA as the stock returned -8.7% in 2020 (through April 6th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
