Is Xilinx, Inc. (XLNX) A Good Stock To Buy?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Xilinx, Inc. (NASDAQ:XLNX).

Is Xilinx, Inc. (NASDAQ:XLNX) a good investment today? Money managers are getting less bullish. The number of bullish hedge fund positions dropped by 2 recently. At the end of this article we will also compare XLNX to other stocks including KeyCorp (NYSE:KEY), Laboratory Corp. of America Holdings (NYSE:LH), and Dr. Reddy’s Laboratories Limited (ADR) (NYSE:RDY) to get a better sense of its popularity.

To most shareholders, hedge funds are viewed as underperforming, outdated financial vehicles of years past. While there are more than 8000 funds in operation at the moment, Our researchers hone in on the masters of this club, around 700 funds. Most estimates calculate that this group of people shepherd the lion’s share of the hedge fund industry’s total capital, and by tailing their inimitable investments, Insider Monkey has unsheathed a few investment strategies that have historically outperformed the broader indices. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Now, let’s take a peek at the new action encompassing Xilinx, Inc. (NASDAQ:XLNX).

What have hedge funds been doing with Xilinx, Inc. (NASDAQ:XLNX)?

At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Clifton S. Robbins’ Blue Harbour Group has the most valuable position in Xilinx, Inc. (NASDAQ:XLNX), worth close to $293.1 million, corresponding to 9.1% of its total 13F portfolio. The second most bullish fund manager is Alkeon Capital Management, managed by Panayotis Takis Sparaggis, which holds a $76.6 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions contain Cliff Asness’ AQR Capital Management, Jim Simons’ Renaissance Technologies and David Harding’s Winton Capital Management.

Because Xilinx, Inc. (NASDAQ:XLNX) has faced a declination in interest from the smart money, we can see that there was a specific group of funds who sold off their positions entirely heading into Q4. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management said goodbye to the biggest stake of all the hedgies followed by Insider Monkey, worth close to $11 million in stock. Daniel S. Och’s fund, OZ Management, also dropped its stock, about $10.5 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 2 funds heading into Q4.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Xilinx, Inc. (NASDAQ:XLNX) but similarly valued. We will take a look at KeyCorp (NYSE:KEY), Laboratory Corp. of America Holdings (NYSE:LH), Dr. Reddy’s Laboratories Limited (ADR) (NYSE:RDY), and ServiceNow Inc (NYSE:NOW). This group of stocks’ market valuations are similar to XLNX’s market valuation.

As you can see these stocks had an average of 29.5 hedge funds with bullish positions and the average amount invested in these stocks was $1037 million. That figure was $1201 million in XLNX’s case. Laboratory Corp. of America Holdings (NYSE:LH) is the most popular stock in this table. On the other hand Dr. Reddy’s Laboratories Limited (ADR) (NYSE:RDY) is the least popular one with only 14 bullish hedge fund positions. Xilinx, Inc. (NASDAQ:XLNX) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LH might be a better candidate to consider a long position.