Is Keysight Technologies Inc (NYSE:KEYS) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Is Keysight Technologies Inc (NYSE:KEYS) the right investment to pursue these days? Money managers are taking a bullish view. The number of bullish hedge fund bets rose by 3 in recent months. Our calculations also showed that KEYS isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s view the new hedge fund action regarding Keysight Technologies Inc (NYSE:KEYS).
Hedge fund activity in Keysight Technologies Inc (NYSE:KEYS)
Heading into the fourth quarter of 2018, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 12% from one quarter earlier. On the other hand, there were a total of 22 hedge funds with a bullish position in KEYS at the beginning of this year. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Keysight Technologies Inc (NYSE:KEYS) was held by Ariel Investments, which reported holding $186.8 million worth of stock at the end of September. It was followed by Balyasny Asset Management with a $74 million position. Other investors bullish on the company included Millennium Management, D E Shaw, and Renaissance Technologies.
Consequently, some big names were breaking ground themselves. Masters Capital Management, managed by Mike Masters, initiated the most outsized call position in Keysight Technologies Inc (NYSE:KEYS). Masters Capital Management had $33.1 million invested in the company at the end of the quarter. Andrew Sandler’s Sandler Capital Management also initiated a $24.9 million position during the quarter. The following funds were also among the new KEYS investors: Matthew Hulsizer’s PEAK6 Capital Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Keysight Technologies Inc (NYSE:KEYS) but similarly valued. These stocks are Akamai Technologies, Inc. (NASDAQ:AKAM), Cna Financial Corporation (NYSE:CNA), HCP, Inc. (NYSE:HCP), and Jack Henry & Associates, Inc. (NASDAQ:JKHY). This group of stocks’ market caps are closest to KEYS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AKAM | 29 | 784777 | 1 |
| CNA | 15 | 80361 | 0 |
| HCP | 25 | 373733 | 5 |
| JKHY | 14 | 272248 | 2 |
| Average | 20.75 | 377780 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.75 hedge funds with bullish positions and the average amount invested in these stocks was $378 million. That figure was $631 million in KEYS’s case. Akamai Technologies, Inc. (NASDAQ:AKAM) is the most popular stock in this table. On the other hand Jack Henry & Associates, Inc. (NASDAQ:JKHY) is the least popular one with only 14 bullish hedge fund positions. Keysight Technologies Inc (NYSE:KEYS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AKAM might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
