How Did Hedge Funds’ Micron Technology, Inc. (MU) Bets Fare?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Micron Technology, Inc. (NASDAQ:MU) based on that data and determine whether they were really smart about the stock.

Micron Technology, Inc. (NASDAQ:MU) shareholders have witnessed a decrease in hedge fund interest recently. Micron Technology, Inc. (NASDAQ:MU) was in 63 hedge funds’ portfolios at the end of September. The all time high for this statistic is 100. Our calculations also showed that MU isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to take a gander at the latest hedge fund action regarding Micron Technology, Inc. (NASDAQ:MU).

Seth Klarman of Baupost Group

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

At third quarter’s end, a total of 63 of the hedge funds tracked by Insider Monkey were long this stock, a change of -28% from the previous quarter. By comparison, 79 hedge funds held shares or bullish call options in MU a year ago. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

More specifically, Arrowstreet Capital was the largest shareholder of Micron Technology, Inc. (NASDAQ:MU), with a stake worth $716.9 million reported as of the end of September. Trailing Arrowstreet Capital was Citadel Investment Group, which amassed a stake valued at $557.6 million. Baupost Group, Matrix Capital Management, and Platinum Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Mohnish Pabrai allocated the biggest weight to Micron Technology, Inc. (NASDAQ:MU), around 58.76% of its 13F portfolio. Pennant Capital Management is also relatively very bullish on the stock, dishing out 13.13 percent of its 13F equity portfolio to MU.

Seeing as Micron Technology, Inc. (NASDAQ:MU) has experienced a decline in interest from hedge fund managers, it’s safe to say that there exists a select few fund managers who sold off their entire stakes by the end of the third quarter. Interestingly, Steve Cohen’s Point72 Asset Management sold off the biggest investment of all the hedgies monitored by Insider Monkey, comprising about $187.1 million in stock, and Martin Taylor’s Crake Asset Management was right behind this move, as the fund dumped about $148.8 million worth. These moves are important to note, as aggregate hedge fund interest fell by 24 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Micron Technology, Inc. (NASDAQ:MU) but similarly valued. These stocks are Dell Technologies Inc. (NYSE:DELL), The TJX Companies, Inc. (NYSE:TJX), Truist Financial Corporation (NYSE:TFC), HCA Healthcare Inc (NYSE:HCA), Zoom Video Communications, Inc. (NASDAQ:ZM), Marsh & McLennan Companies, Inc. (NYSE:MMC), and General Motors Company (NYSE:GM). This group of stocks’ market values resemble MU’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 57.7 hedge funds with bullish positions and the average amount invested in these stocks was $3781 million. That figure was $3841 million in MU’s case. General Motors Company (NYSE:GM) is the most popular stock in this table. On the other hand Truist Financial Corporation (NYSE:TFC) is the least popular one with only 34 bullish hedge fund positions. Micron Technology, Inc. (NASDAQ:MU) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MU is 33.6. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on MU as the stock returned 16% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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