A market surge in the first quarter, spurred by easing global macroeconomic concerns and Powell’s pivot ended up having a positive impact on the markets and many hedge funds as a result. The stocks of smaller companies which were especially hard hit during the fourth quarter slightly outperformed the market during the first quarter. Unfortunately, Trump is unpredictable and volatility returned in the second quarter and smaller-cap stocks went back to selling off. We finished compiling the latest 13F filings to get an idea about what hedge funds are thinking about the overall market as well as individual stocks. In this article we will study the hedge fund sentiment to see how those concerns affected their ownership of Maxim Integrated Products Inc. (NASDAQ:MXIM) during the quarter.
Is Maxim Integrated Products Inc. (NASDAQ:MXIM) worth your attention right now? Hedge funds are getting more optimistic. The number of bullish hedge fund bets rose by 3 in recent months. Our calculations also showed that MXIM isn’t among the 30 most popular stocks among hedge funds. MXIM was in 27 hedge funds’ portfolios at the end of March. There were 24 hedge funds in our database with MXIM positions at the end of the previous quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a glance at the recent hedge fund action regarding Maxim Integrated Products Inc. (NASDAQ:MXIM).
What does the smart money think about Maxim Integrated Products Inc. (NASDAQ:MXIM)?
Heading into the second quarter of 2019, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in MXIM over the last 15 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Ken Griffin’s Citadel Investment Group has the largest position in Maxim Integrated Products Inc. (NASDAQ:MXIM), worth close to $79.7 million, corresponding to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Renaissance Technologies, managed by Jim Simons, which holds a $57.1 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism encompass John Overdeck and David Siegel’s Two Sigma Advisors, Israel Englander’s Millennium Management and Noam Gottesman’s GLG Partners.
As one would reasonably expect, key hedge funds were leading the bulls’ herd. BlueCrest Capital Mgmt., managed by Michael Platt and William Reeves, assembled the largest position in Maxim Integrated Products Inc. (NASDAQ:MXIM). BlueCrest Capital Mgmt. had $1.4 million invested in the company at the end of the quarter. Dipak Patel’s Alight Capital also initiated a $1.3 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Jeffrey Talpins’s Element Capital Management, and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Maxim Integrated Products Inc. (NASDAQ:MXIM) but similarly valued. These stocks are Nasdaq, Inc. (NASDAQ:NDAQ), Arthur J. Gallagher & Co. (NYSE:AJG), Regions Financial Corporation (NYSE:RF), and Equifax Inc. (NYSE:EFX). This group of stocks’ market caps are similar to MXIM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NDAQ | 16 | 83129 | -5 |
| AJG | 28 | 321793 | 6 |
| RF | 41 | 787954 | -1 |
| EFX | 24 | 1247020 | 2 |
| Average | 27.25 | 609974 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.25 hedge funds with bullish positions and the average amount invested in these stocks was $610 million. That figure was $331 million in MXIM’s case. Regions Financial Corporation (NYSE:RF) is the most popular stock in this table. On the other hand Nasdaq, Inc. (NASDAQ:NDAQ) is the least popular one with only 16 bullish hedge fund positions. Maxim Integrated Products Inc. (NASDAQ:MXIM) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on MXIM, though not to the same extent, as the stock returned 0.8% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
