In this article we will check out the progression of hedge fund sentiment towards Qorvo Inc (NASDAQ:QRVO) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is QRVO a good stock to buy now? Hedge fund interest in Qorvo Inc (NASDAQ:QRVO) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that QRVO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare QRVO to other stocks including Warner Music Group Corp. (NASDAQ:WMG), Martin Marietta Materials, Inc. (NYSE:MLM), and Campbell Soup Company (NYSE:CPB) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are a large number of gauges stock traders have at their disposal to grade their holdings. A duo of the most useful gauges are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the best fund managers can outclass the market by a superb margin (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 5 best cheap stocks to buy according to Ray Dalio to identify stocks with 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. Keeping this in mind let’s take a glance at the fresh hedge fund action surrounding Qorvo Inc (NASDAQ:QRVO).
How are hedge funds trading Qorvo Inc (NASDAQ:QRVO)?
At Q3’s end, a total of 51 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in QRVO over the last 21 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.
More specifically, Baupost Group was the largest shareholder of Qorvo Inc (NASDAQ:QRVO), with a stake worth $382.2 million reported as of the end of September. Trailing Baupost Group was Citadel Investment Group, which amassed a stake valued at $190.1 million. AQR Capital Management, Iridian Asset Management, and Point72 Asset Management 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 Baupost Group allocated the biggest weight to Qorvo Inc (NASDAQ:QRVO), around 4.13% of its 13F portfolio. Antipodes Partners is also relatively very bullish on the stock, setting aside 3.56 percent of its 13F equity portfolio to QRVO.
Seeing as Qorvo Inc (NASDAQ:QRVO) has witnessed falling interest from the smart money, it’s safe to say that there were a few money managers that slashed their positions entirely last quarter. At the top of the heap, Josh Resnick’s Jericho Capital Asset Management said goodbye to the biggest position of all the hedgies tracked by Insider Monkey, valued at an estimated $73.3 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund cut about $59.9 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks similar to Qorvo Inc (NASDAQ:QRVO). We will take a look at Warner Music Group Corp. (NASDAQ:WMG), Martin Marietta Materials, Inc. (NYSE:MLM), Campbell Soup Company (NYSE:CPB), Healthpeak Properties, Inc. (NYSE:PEAK), Energy Transfer L.P. (NYSE:ET), Li Auto Inc. (NASDAQ:LI), and ArcelorMittal (NYSE:MT). This group of stocks’ market values are similar to QRVO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WMG | 20 | 662192 | -11 |
| MLM | 38 | 1934050 | -13 |
| CPB | 28 | 533547 | -4 |
| PEAK | 22 | 290836 | -1 |
| ET | 31 | 427313 | 0 |
| LI | 26 | 256910 | 26 |
| MT | 20 | 309854 | 1 |
| Average | 26.4 | 630672 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.4 hedge funds with bullish positions and the average amount invested in these stocks was $631 million. That figure was $1668 million in QRVO’s case. Martin Marietta Materials, Inc. (NYSE:MLM) is the most popular stock in this table. On the other hand Warner Music Group Corp. (NASDAQ:WMG) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks Qorvo Inc (NASDAQ:QRVO) is more popular among hedge funds. Our overall hedge fund sentiment score for QRVO is 85. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 31.6% in 2020 through December 2nd but still managed to beat the market by 16 percentage points. Hedge funds were also right about betting on QRVO as the stock returned 23.7% since the end of September (through 12/2) 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.
