We can judge whether Intel Corporation (NASDAQ:INTC) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
Intel Corporation (NASDAQ:INTC) investors should be aware of an increase in enthusiasm from smart money in recent months. Our calculations also showed that INTC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Kerr Neilson of Platinum Asset Management
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s take a glance at the latest hedge fund action encompassing Intel Corporation (NASDAQ:INTC).
Hedge fund activity in Intel Corporation (NASDAQ:INTC)
At Q3’s end, a total of 58 of the hedge funds tracked by Insider Monkey were long this stock, a change of 35% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards INTC over the last 17 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.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in Intel Corporation (NASDAQ:INTC). Fisher Asset Management has a $1.3951 billion position in the stock, comprising 1.5% of its 13F portfolio. Coming in second is AQR Capital Management, led by Cliff Asness, holding a $766.6 million position; 0.9% of its 13F portfolio is allocated to the company. Other members of the smart money that are bullish encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, David E. Shaw’s D E Shaw and Kerr Neilson’s Platinum Asset Management. In terms of the portfolio weights assigned to each position MFP Investors allocated the biggest weight to Intel Corporation (NASDAQ:INTC), around 14.53% of its portfolio. Platinum Asset Management is also relatively very bullish on the stock, dishing out 6.37 percent of its 13F equity portfolio to INTC.
Consequently, some big names have jumped into Intel Corporation (NASDAQ:INTC) headfirst. Two Sigma Advisors, managed by John Overdeck and David Siegel, created the most valuable position in Intel Corporation (NASDAQ:INTC). Two Sigma Advisors had $96.4 million invested in the company at the end of the quarter. Mike Masters’s Masters Capital Management also initiated a $51.5 million position during the quarter. The following funds were also among the new INTC investors: Donald Sussman’s Paloma Partners, Paul Marshall and Ian Wace’s Marshall Wace, and Renaissance Technologies.
Let’s also examine hedge fund activity in other stocks similar to Intel Corporation (NASDAQ:INTC). We will take a look at Chevron Corporation (NYSE:CVX), Wells Fargo & Company (NYSE:WFC), Merck & Co., Inc. (NYSE:MRK), and The Boeing Company (NYSE:BA). This group of stocks’ market caps match INTC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CVX | 48 | 1775593 | 4 |
| WFC | 62 | 25231139 | -3 |
| MRK | 73 | 4568239 | 3 |
| BA | 78 | 3964531 | 4 |
| Average | 65.25 | 8884876 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 65.25 hedge funds with bullish positions and the average amount invested in these stocks was $8885 million. That figure was $4800 million in INTC’s case. The Boeing Company (NYSE:BA) is the most popular stock in this table. On the other hand Chevron Corporation (NYSE:CVX) is the least popular one with only 48 bullish hedge fund positions. Intel Corporation (NASDAQ:INTC) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on INTC as the stock returned 13.3% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
