Is Cisco (CSCO) Stock A Buy or Sell?

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 fourth 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 5 years and analyze what the smart money thinks of Cisco Systems, Inc. (NASDAQ:CSCO) based on that data.

Is CSCO stock a buy or sell? Cisco Systems, Inc. (NASDAQ:CSCO) shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. Cisco Systems, Inc. (NASDAQ:CSCO) was in 60 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 68. Our calculations also showed that CSCO isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

David Blood of Generation Investment Management

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

Heading into the first quarter of 2021, a total of 60 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CSCO over the last 22 quarters. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Generation Investment Management, managed by David Blood and Al Gore, holds the most valuable position in Cisco Systems, Inc. (NASDAQ:CSCO). Generation Investment Management has a $1.0435 billion position in the stock, comprising 4.7% of its 13F portfolio. The second most bullish fund manager is Ken Fisher of Fisher Asset Management, with a $938.9 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Remaining peers that are bullish encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, D. E. Shaw’s D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Generation Investment Management allocated the biggest weight to Cisco Systems, Inc. (NASDAQ:CSCO), around 4.66% of its 13F portfolio. Humankind Investments is also relatively very bullish on the stock, earmarking 3.83 percent of its 13F equity portfolio to CSCO.

As industrywide interest jumped, key money managers were breaking ground themselves. Woodline Partners, managed by Michael Rockefeller and Karl Kroeker, initiated the largest position in Cisco Systems, Inc. (NASDAQ:CSCO). Woodline Partners had $14.3 million invested in the company at the end of the quarter. Nicholas Bagnall’s Te Ahumairangi Investment Management also made a $9.3 million investment in the stock during the quarter. The other funds with brand new CSCO positions are Ray Dalio’s Bridgewater Associates, James Katz’s Humankind Investments, and Qing Li’s Sciencast Management.

Let’s now take a look at hedge fund activity in other stocks similar to Cisco Systems, Inc. (NASDAQ:CSCO). These stocks are Thermo Fisher Scientific Inc. (NYSE:TMO), Broadcom Inc (NASDAQ:AVGO), Exxon Mobil Corporation (NYSE:XOM), Accenture Plc (NYSE:ACN), QUALCOMM, Incorporated (NASDAQ:QCOM), T-Mobile US, Inc. (NYSE:TMUS), and Costco Wholesale Corporation (NASDAQ:COST). This group of stocks’ market values are closest to CSCO’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 72.9 hedge funds with bullish positions and the average amount invested in these stocks was $4088 million. That figure was $4974 million in CSCO’s case. T-Mobile US, Inc. (NYSE:TMUS) is the most popular stock in this table. On the other hand Accenture Plc (NYSE:ACN) is the least popular one with only 50 bullish hedge fund positions. Cisco Systems, Inc. (NASDAQ:CSCO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CSCO is 41.9. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. A small number of hedge funds were also right about betting on CSCO as the stock returned 10.3% since the end of the fourth quarter (through 3/19) and outperformed the market by an even larger margin.

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

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