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 successful 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 (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) 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) an excellent stock to buy now? Money managers are actually taking a pessimistic view. The number of long hedge fund bets that are revealed through the 13F filings experienced a decline of 1 recently. KEYS was in 14 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with KEYS holdings at the end of the previous quarter. 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 Sun Communities Inc (NYSE:SUI), Senior Housing Properties Trust (NYSE:SNH), and United Microelectronics Corp (ADR) (NYSE:UMC) to gather more data points.
Follow Keysight Technologies Inc. (NYSE:KEYS)
Follow Keysight Technologies Inc. (NYSE:KEYS)
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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How have hedgies been trading Keysight Technologies Inc (NYSE:KEYS)?
Heading into the fourth quarter of 2016, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 7% dip from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards KEYS over the last 5 quarters, which shows a clear downtrend in bullish hedge fund positions. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, D E Shaw, founded by David E. Shaw, holds the most valuable position in Keysight Technologies Inc (NYSE:KEYS). D E Shaw has a $66.1 million position in the stock. The second largest stake is held by Diamond Hill Capital, led by Ric Dillon, which holds a $24.1 million position. Other peers that hold long positions comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Jim Simons’ Renaissance Technologies, and Paul Marshall and Ian Wace’s Marshall Wace LLP. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Because Keysight Technologies Inc (NYSE:KEYS) has gone through declining sentiment from the entirety of the hedge funds we track, we can see that there exists a select few hedgies that slashed their full holdings by the end of the third quarter. Intriguingly, Andre F. Perold’s HighVista Strategies dumped the largest investment of the 700 funds tracked by Insider Monkey, comprising an estimated $1.2 million in stock, and Michael Platt and William Reeves’ BlueCrest Capital Mgmt. was right behind this move, as the fund sold off about $0.2 million worth of shares.
Let’s now take a look at hedge fund activity in other stocks similar to Keysight Technologies Inc (NYSE:KEYS). We will take a look at Sun Communities Inc (NYSE:SUI), Senior Housing Properties Trust (NYSE:SNH), United Microelectronics Corp (ADR) (NYSE:UMC), and Southwestern Energy Company (NYSE:SWN). This group of stocks’ market valuations are closest to KEYS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SUI | 17 | 236373 | -5 |
| SNH | 13 | 83107 | -3 |
| UMC | 8 | 31362 | -1 |
| SWN | 37 | 1263324 | -11 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $404 million. That figure was $144 million in KEYS’s case. Southwestern Energy Company (NYSE:SWN) is the most popular stock in this table. On the other hand United Microelectronics Corp (ADR) (NYSE:UMC) is the least popular one with only 8 bullish hedge fund positions. Keysight Technologies Inc (NYSE:KEYS) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SWN might be a better candidate to consider taking a long position in.
Disclosure: None
