Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Micron and Anadarko Petroleum, have not done well during the last 12 months ending in October due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last four quarters ending in October and sixty three percent of these 30 stocks outperformed the market. S&P 500 Index returned only 5.2% during the same period and less than 49% of its constituents managed to beat this return. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Seagate Technology PLC (NASDAQ:STX) from the perspective of those elite funds.
Seagate Technology PLC (NASDAQ:STX) has seen a decrease in activity from the world’s largest hedge funds lately. 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 Molson Coors Brewing Company (NYSE:TAP), Nordstrom, Inc. (NYSE:JWN), and WestRock Co (NYSE:WRK) to gather more data points.
Follow Seagate Technology Holdings Plc (NASDAQ:STX)
Follow Seagate Technology Holdings Plc (NASDAQ:STX)
Now, we’re going to check out the latest action regarding Seagate Technology PLC (NASDAQ:STX).
Hedge fund activity in Seagate Technology PLC (NASDAQ:STX)
At Q3’s end, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Winton Capital Management, managed by David Harding, holds the number one position in Seagate Technology PLC (NASDAQ:STX). Winton Capital Management has a $119 million position in the stock, comprising 0.9% of its 13F portfolio. The second largest stake is held by Iridian Asset Management, led by David Cohen and Harold Levy, holding a $109.6 million position; 0.9% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions comprise Matthew Hulsizer’s PEAK6 Capital Management, and Cliff Asness’ AQR Capital Management.
Since Seagate Technology PLC (NASDAQ:STX) has experienced falling interest from hedge fund managers, logic holds that there exists a select few money managers who were dropping their entire stakes by the end of the third quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management dropped the biggest stake of all the hedgies watched by Insider Monkey, valued at an estimated $29.7 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also sold off its stock, about $23.3 million worth. These transactions are important to note, as total hedge fund interest was cut by 4 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks similar to Seagate Technology PLC (NASDAQ:STX). These stocks are Molson Coors Brewing Company (NYSE:TAP), Nordstrom, Inc. (NYSE:JWN), WestRock Co (NYSE:WRK), and Ingersoll-Rand PLC (NYSE:IR). All of these stocks’ market caps are closest to STX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TAP | 70 | 3073983 | 4 |
| JWN | 38 | 840884 | 11 |
| WRK | 42 | 1474208 | 41 |
| IR | 42 | 1439823 | 5 |
As you can see these stocks had an average of 48 hedge funds with bullish positions and the average amount invested in these stocks was $1707 million. That figure was $487 million in STX’s case. Molson Coors Brewing Company (NYSE:TAP) is the most popular stock in this table. On the other hand Nordstrom, Inc. (NYSE:JWN) is the least popular one with only 38 bullish hedge fund positions. Compared to these stocks Seagate Technology PLC (NASDAQ:STX) is even less popular than JWN. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
