The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 867 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30th holdings, data that is available nowhere else. Should you consider Xerox Holdings Corporation (NYSE:XRX) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is XRX a good stock to buy? Xerox Holdings Corporation (NYSE:XRX) was in 35 hedge funds’ portfolios at the end of September. The all time high for this statistic is 44. XRX has seen an increase in enthusiasm from smart money of late. There were 25 hedge funds in our database with XRX holdings at the end of June. Our calculations also showed that XRX 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 fresh hedge fund action surrounding Xerox Holdings Corporation (NYSE:XRX).
Do Hedge Funds Think XRX Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 35 of the hedge funds tracked by Insider Monkey were long this stock, a change of 40% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in XRX over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Icahn Capital LP held the most valuable stake in Xerox Holdings Corporation (NYSE:XRX), which was worth $628.1 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $82.4 million worth of shares. Point72 Asset Management, Mason Capital Management, and TOMS 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 Mason Capital Management allocated the biggest weight to Xerox Holdings Corporation (NYSE:XRX), around 5.07% of its 13F portfolio. TOMS Capital is also relatively very bullish on the stock, designating 3.51 percent of its 13F equity portfolio to XRX.
As aggregate interest increased, some big names have been driving this bullishness. Icahn Capital LP, managed by Carl Icahn, created the largest position in Xerox Holdings Corporation (NYSE:XRX). Icahn Capital LP had $628.1 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $70.8 million investment in the stock during the quarter. The other funds with brand new XRX positions are Joseph Samuels’s Islet Management, Michael Rockefeller and KarláKroeker’s Woodline Partners, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s now take a look at hedge fund activity in other stocks similar to Xerox Holdings Corporation (NYSE:XRX). These stocks are Viavi Solutions Inc (NASDAQ:VIAV), Riskified Ltd. (NYSE:RSKD), frontdoor, inc. (NASDAQ:FTDR), Apple Hospitality REIT Inc (NYSE:APLE), Altra Industrial Motion Corp. (NASDAQ:AIMC), Box, Inc. (NYSE:BOX), and Resideo Technologies, Inc. (NYSE:REZI). This group of stocks’ market caps are similar to XRX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VIAV | 23 | 228421 | -1 |
| RSKD | 16 | 59652 | 16 |
| FTDR | 36 | 574044 | 3 |
| APLE | 15 | 186645 | -1 |
| AIMC | 14 | 18481 | 8 |
| BOX | 29 | 644232 | -6 |
| REZI | 28 | 525837 | 0 |
| Average | 23 | 319616 | 2.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $320 million. That figure was $987 million in XRX’s case. frontdoor, inc. (NASDAQ:FTDR) is the most popular stock in this table. On the other hand Altra Industrial Motion Corp. (NASDAQ:AIMC) is the least popular one with only 14 bullish hedge fund positions. Xerox Holdings Corporation (NYSE:XRX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for XRX is 81.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 beat the market again by 5.6 percentage points. Unfortunately XRX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on XRX were disappointed as the stock returned -8.7% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Xerox Holdings Corp (NYSE:XRX)
Follow Xerox Holdings Corp (NYSE:XRX)
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Disclosure: None. This article was originally published at Insider Monkey.
