The Insider Monkey team has completed processing the quarterly 13F filings for the December quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards MagnaChip Semiconductor Corporation (NYSE:MX).
Is MX stock a buy? MagnaChip Semiconductor Corporation (NYSE:MX) investors should pay attention to an increase in enthusiasm from smart money recently. MagnaChip Semiconductor Corporation (NYSE:MX) was in 28 hedge funds’ portfolios at the end of December. The all time high for this statistic is 27. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that MX 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. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Howard Marks of Oaktree Capital Management
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 check out the latest hedge fund action surrounding MagnaChip Semiconductor Corporation (NYSE:MX).
Do Hedge Funds Think MX Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MX over the last 22 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.
Among these funds, Oaktree Capital Management held the most valuable stake in MagnaChip Semiconductor Corporation (NYSE:MX), which was worth $43.5 million at the end of the fourth quarter. On the second spot was Rubric Capital Management which amassed $35.3 million worth of shares. Toronado Partners, Greenhouse Funds, and Clearline Capital 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 North Run Capital allocated the biggest weight to MagnaChip Semiconductor Corporation (NYSE:MX), around 13.12% of its 13F portfolio. Toronado Partners is also relatively very bullish on the stock, earmarking 7.08 percent of its 13F equity portfolio to MX.
As one would reasonably expect, key money managers have jumped into MagnaChip Semiconductor Corporation (NYSE:MX) headfirst. Millennium Management, managed by Israel Englander, established the biggest position in MagnaChip Semiconductor Corporation (NYSE:MX). Millennium Management had $3.8 million invested in the company at the end of the quarter. Jack Ripsteen’s Potrero Capital Research also made a $2 million investment in the stock during the quarter. The following funds were also among the new MX investors: Michael Gelband’s ExodusPoint Capital and Minhua Zhang’s Weld Capital Management.
Let’s now review hedge fund activity in other stocks similar to MagnaChip Semiconductor Corporation (NYSE:MX). We will take a look at Urstadt Biddle Properties Inc. (NYSE:UBP), Prothena Corporation plc (NASDAQ:PRTA), Renalytix AI plc (NASDAQ:RNLX), Clarus Corporation (NASDAQ:CLAR), BeyondSpring, Inc. (NASDAQ:BYSI), Bridge Bancorp, Inc. (NASDAQ:BDGE), and Hoegh LNG Partners LP (NYSE:HMLP). All of these stocks’ market caps match MX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UBP | 1 | 936 | -2 |
| PRTA | 20 | 233123 | -3 |
| RNLX | 6 | 24299 | 2 |
| CLAR | 17 | 69763 | 2 |
| BYSI | 9 | 18288 | 5 |
| BDGE | 9 | 78798 | -3 |
| HMLP | 6 | 16298 | 1 |
| Average | 9.7 | 63072 | 0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.7 hedge funds with bullish positions and the average amount invested in these stocks was $63 million. That figure was $225 million in MX’s case. Prothena Corporation plc (NASDAQ:PRTA) is the most popular stock in this table. On the other hand Urstadt Biddle Properties Inc. (NYSE:UBP) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks MagnaChip Semiconductor Corporation (NYSE:MX) is more popular among hedge funds. Our overall hedge fund sentiment score for MX is 86. 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 returned 12.3% in 2021 through April 19th but still managed to beat the market by 0.9 percentage points. Hedge funds were also right about betting on MX as the stock returned 92.4% since the end of December (through 4/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
