After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of December 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Lattice Semiconductor Corporation (NASDAQ:LSCC).
Is LSCC stock a buy? The best stock pickers were cutting their exposure. The number of long hedge fund bets were cut by 1 in recent months. Lattice Semiconductor Corporation (NASDAQ:LSCC) was in 23 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 32. Our calculations also showed that LSCC isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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 monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Richard Driehaus of Driehaus Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now 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. With all of this in mind we’re going to take a glance at the latest hedge fund action regarding Lattice Semiconductor Corporation (NASDAQ:LSCC).
Do Hedge Funds Think LSCC Is A Good Stock To Buy Now?
At the end of December, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the previous quarter. By comparison, 32 hedge funds held shares or bullish call options in LSCC a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Daniel Patrick Gibson’s Sylebra Capital Management has the largest position in Lattice Semiconductor Corporation (NASDAQ:LSCC), worth close to $87.7 million, amounting to 2.2% of its total 13F portfolio. The second most bullish fund manager is Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, which holds a $79.8 million position; 0.5% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions consist of Chuck Royce’s Royce & Associates, Richard Driehaus’s Driehaus Capital and Noam Gottesman’s GLG Partners. In terms of the portfolio weights assigned to each position Sylebra Capital Management allocated the biggest weight to Lattice Semiconductor Corporation (NASDAQ:LSCC), around 2.23% of its 13F portfolio. Southport Management is also relatively very bullish on the stock, earmarking 2.06 percent of its 13F equity portfolio to LSCC.
Because Lattice Semiconductor Corporation (NASDAQ:LSCC) has experienced falling interest from hedge fund managers, we can see that there was a specific group of hedgies that decided to sell off their positions entirely heading into Q1. At the top of the heap, Didric Cederholm’s Lion Point dumped the largest position of all the hedgies tracked by Insider Monkey, worth about $13.3 million in stock, and Renaissance Technologies was right behind this move, as the fund cut about $9.1 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 1 funds heading into Q1.
Let’s go over hedge fund activity in other stocks similar to Lattice Semiconductor Corporation (NASDAQ:LSCC). These stocks are Exelixis, Inc. (NASDAQ:EXEL), Tetra Tech, Inc. (NASDAQ:TTEK), Littelfuse, Inc. (NASDAQ:LFUS), AppFolio Inc (NASDAQ:APPF), Pure Storage, Inc. (NYSE:PSTG), Stitch Fix, Inc. (NASDAQ:SFIX), and Clearway Energy, Inc. (NYSE:CWEN). This group of stocks’ market valuations match LSCC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EXEL | 24 | 917565 | -10 |
| TTEK | 29 | 98927 | 7 |
| LFUS | 21 | 486085 | -1 |
| APPF | 19 | 475881 | -7 |
| PSTG | 21 | 1128272 | -1 |
| SFIX | 32 | 688920 | 7 |
| CWEN | 22 | 286227 | 3 |
| Average | 24 | 583125 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $583 million. That figure was $266 million in LSCC’s case. Stitch Fix, Inc. (NASDAQ:SFIX) is the most popular stock in this table. On the other hand AppFolio Inc (NASDAQ:APPF) is the least popular one with only 19 bullish hedge fund positions. Lattice Semiconductor Corporation (NASDAQ:LSCC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LSCC is 40.9. 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 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. A small number of hedge funds were also right about betting on LSCC as the stock returned 22% since the end of the fourth quarter (through 4/19) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
