The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 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 September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Synopsys, Inc. (NASDAQ:SNPS) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Synopsys, Inc. (NASDAQ:SNPS) has seen an increase in activity from the world’s largest hedge funds recently. Synopsys, Inc. (NASDAQ:SNPS) was in 43 hedge funds’ portfolios at the end of September. The all time high for this statistic is 45. Our calculations also showed that SNPS 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. Keeping this in mind let’s take a glance at the key hedge fund action encompassing Synopsys, Inc. (NASDAQ:SNPS).
David Blood of Generation Investment Management
Do Hedge Funds Think SNPS Is A Good Stock To Buy Now?
At third quarter’s end, a total of 43 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in SNPS over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Alkeon Capital Management held the most valuable stake in Synopsys, Inc. (NASDAQ:SNPS), which was worth $1003.5 million at the end of the third quarter. On the second spot was Generation Investment Management which amassed $292 million worth of shares. AQR Capital Management, GLG Partners, and Arrowstreet Capital 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 Crestwood Capital Management allocated the biggest weight to Synopsys, Inc. (NASDAQ:SNPS), around 5.77% of its 13F portfolio. Force Hill Capital Management is also relatively very bullish on the stock, designating 4.98 percent of its 13F equity portfolio to SNPS.
Now, key hedge funds were breaking ground themselves. Antipodes Partners, managed by Jacob Mitchell, assembled the biggest position in Synopsys, Inc. (NASDAQ:SNPS). Antipodes Partners had $45.2 million invested in the company at the end of the quarter. Renaissance Technologies also made a $39.4 million investment in the stock during the quarter. The following funds were also among the new SNPS investors: Jinghua Yan’s TwinBeech Capital, Peter Muller’s PDT Partners, and Ran Pang’s Quantamental Technologies.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Synopsys, Inc. (NASDAQ:SNPS) but similarly valued. We will take a look at BCE Inc. (NYSE:BCE), eBay Inc (NASDAQ:EBAY), Palantir Technologies Inc. (NYSE:PLTR), The Kraft Heinz Company (NASDAQ:KHC), TE Connectivity Ltd. (NYSE:TEL), Carrier Global Corporation (NYSE:CARR), and The Bank of New York Mellon Corporation (NYSE:BK). All of these stocks’ market caps resemble SNPS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BCE | 15 | 129110 | 1 |
| EBAY | 49 | 2097933 | 10 |
| PLTR | 35 | 1634776 | 9 |
| KHC | 33 | 12321504 | 0 |
| TEL | 41 | 2188058 | 2 |
| CARR | 46 | 1324758 | 0 |
| BK | 46 | 4657475 | -6 |
| Average | 37.9 | 3479088 | 2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 37.9 hedge funds with bullish positions and the average amount invested in these stocks was $3479 million. That figure was $2344 million in SNPS’s case. eBay Inc (NASDAQ:EBAY) is the most popular stock in this table. On the other hand BCE Inc. (NYSE:BCE) is the least popular one with only 15 bullish hedge fund positions. Synopsys, Inc. (NASDAQ:SNPS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SNPS is 76.8. 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 managed to beat the market by another 3.6 percentage points. Hedge funds were somewhat right about betting on SNPS as the stock returned 3.7% since the end of September (through January 31st) and outperformed the top 5 hedge fund stocks but not the market. This is a rare phenomenon as top hedge fund stocks usually beat the market over the long-term.
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Disclosure: None. This article was originally published at Insider Monkey.
