Is EQIX Stock A Buy or Sell?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider Equinix Inc (NASDAQ:EQIX) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is EQIX stock a buy or sell? Equinix Inc (NASDAQ:EQIX) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 42 hedge funds’ portfolios at the end of December. Our calculations also showed that EQIX isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as PNC Financial Services Group Inc. (NYSE:PNC), Brookfield Asset Management Inc. (NYSE:BAM), and Ecolab Inc. (NYSE:ECL) to gather more data points.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).

Peter Rathjens of Arrowstreet Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we’re going to review the key hedge fund action regarding Equinix Inc (NASDAQ:EQIX).

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

At Q4’s end, a total of 42 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 43 hedge funds with a bullish position in EQIX a year ago. 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, GQG Partners held the most valuable stake in Equinix Inc (NASDAQ:EQIX), which was worth $490.5 million at the end of the fourth quarter. On the second spot was Alkeon Capital Management which amassed $344.9 million worth of shares. Impax Asset Management, Rokos Capital Management, and Millennium 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 Tensile Capital allocated the biggest weight to Equinix Inc (NASDAQ:EQIX), around 6.2% of its 13F portfolio. Rokos Capital Management is also relatively very bullish on the stock, designating 4.28 percent of its 13F equity portfolio to EQIX.

Judging by the fact that Equinix Inc (NASDAQ:EQIX) has experienced bearish sentiment from hedge fund managers, we can see that there is a sect of funds that decided to sell off their full holdings last quarter. Interestingly, Farallon Capital sold off the largest stake of all the hedgies watched by Insider Monkey, totaling an estimated $152.2 million in stock, and Edmond M. Safra’s EMS Capital was right behind this move, as the fund cut about $74 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks similar to Equinix Inc (NASDAQ:EQIX). These stocks are PNC Financial Services Group Inc. (NYSE:PNC), Brookfield Asset Management Inc. (NYSE:BAM), Ecolab Inc. (NYSE:ECL), Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), Dominion Energy Inc. (NYSE:D), Air Products & Chemicals, Inc. (NYSE:APD), and Norfolk Southern Corp. (NYSE:NSC). This group of stocks’ market values are closest to EQIX’s market value.

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As you can see these stocks had an average of 44.6 hedge funds with bullish positions and the average amount invested in these stocks was $1521 million. That figure was $2001 million in EQIX’s case. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is the most popular stock in this table. On the other hand PNC Financial Services Group Inc. (NYSE:PNC) is the least popular one with only 35 bullish hedge fund positions. Equinix Inc (NASDAQ:EQIX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EQIX is 47.4. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 surpassed the market again by 0.8 percentage points. Unfortunately EQIX wasn’t nearly as popular as these 30 stocks (hedge fund sentiment was quite bearish); EQIX investors were disappointed as the stock returned -8.2% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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

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