Is NXP Semiconductors NV (NXPI) A Good Stock To Buy?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of NXP Semiconductors NV (NASDAQ:NXPI) based on that data.

Is NXPI a good stock to buy? NXP Semiconductors NV (NASDAQ:NXPI) was in 51 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 93. NXPI investors should be aware of a decrease in enthusiasm from smart money of late. There were 52 hedge funds in our database with NXPI positions at the end of the second quarter. Our calculations also showed that NXPI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to take a peek at the new hedge fund action regarding NXP Semiconductors NV (NASDAQ:NXPI).

John Petry of Sessa Capital

Do Hedge Funds Think NXPI Is A Good Stock To Buy Now?

At Q3’s end, a total of 51 of the hedge funds tracked by Insider Monkey were long this stock, a change of -2% from one quarter earlier. On the other hand, there were a total of 68 hedge funds with a bullish position in NXPI a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Fisher’s Fisher Asset Management has the biggest position in NXP Semiconductors NV (NASDAQ:NXPI), worth close to $182.1 million, comprising 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is First Pacific Advisors LLC, led by Robert Rodriguez and Steven Romick, holding a $127.9 million position; 1.7% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions contain John Petry’s Sessa Capital, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Mountain Road Advisors allocated the biggest weight to NXP Semiconductors NV (NASDAQ:NXPI), around 9.4% of its 13F portfolio. Force Hill Capital Management is also relatively very bullish on the stock, designating 5.59 percent of its 13F equity portfolio to NXPI.

Due to the fact that NXP Semiconductors NV (NASDAQ:NXPI) has faced a decline in interest from the aggregate hedge fund industry, logic holds that there exists a select few funds that decided to sell off their full holdings by the end of the third quarter. Interestingly, Brandon Haley’s Holocene Advisors said goodbye to the biggest stake of the “upper crust” of funds watched by Insider Monkey, valued at an estimated $86.6 million in stock, and Robert Boucai’s Newbrook Capital Advisors was right behind this move, as the fund dropped about $19.4 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 1 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as NXP Semiconductors NV (NASDAQ:NXPI) but similarly valued. These stocks are Ferrari N.V. (NYSE:RACE), Itau Unibanco Holding SA (NYSE:ITUB), Takeda Pharmaceutical Company Limited (NYSE:TAK), Prudential Public Limited Company (NYSE:PUK), Chipotle Mexican Grill, Inc. (NYSE:CMG), KLA Corporation (NASDAQ:KLAC), and DocuSign, Inc. (NASDAQ:DOCU). This group of stocks’ market valuations match NXPI’s market valuation.

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As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $1683 million. That figure was $1081 million in NXPI’s case. DocuSign, Inc. (NASDAQ:DOCU) is the most popular stock in this table. On the other hand Prudential Public Limited Company (NYSE:PUK) is the least popular one with only 4 bullish hedge fund positions. NXP Semiconductors NV (NASDAQ:NXPI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NXPI is 70.5. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on NXPI as the stock returned 14% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.