Is Cadence Design Systems Inc (CDNS) A Good Stock To Buy?

We at Insider Monkey have gone over 742 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article, we look at what those funds think of Cadence Design Systems Inc (NASDAQ:CDNS) based on that data.

Cadence Design Systems Inc (NASDAQ:CDNS) investors should be aware of a decrease in support from the world’s most elite money managers lately. CDNS was in 26 hedge funds’ portfolios at the end of the third quarter of 2016. There were 29 hedge funds in our database with CDNS holdings at the end of the previous quarter. At the end of this article we will also compare CDNS to other stocks including New York Community Bancorp, Inc. (NYSE:NYCB), Icahn Enterprises LP (NASDAQ:IEP), and W.P. Carey Inc. REIT (NYSE:WPC) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Keeping this in mind, we’re going to take a gander at the new action regarding Cadence Design Systems Inc (NASDAQ:CDNS).

What does the smart money think about Cadence Design Systems Inc (NASDAQ:CDNS)?

At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 10% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, David S. Winter and David J. Millstone’s 40 North Management has the biggest position in Cadence Design Systems Inc (NASDAQ:CDNS), worth close to $223.7 million, comprising 40.8% of its total 13F portfolio. The second most bullish fund manager is Alkeon Capital Management, led by Panayotis Takis Sparaggis, holding a $149.8 million position; 2.8% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish contain Mariko Gordon’s Daruma Asset Management, Cliff Asness’s AQR Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.