After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 28. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Xperi Corporation (NASDAQ:XPER).
Xperi Corporation (NASDAQ:XPER) was in 21 hedge funds’ portfolios at the end of the second quarter of 2019. XPER investors should be aware of a decrease in hedge fund sentiment in recent months. There were 23 hedge funds in our database with XPER positions at the end of the previous quarter. Our calculations also showed that XPER isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to check out the recent hedge fund action surrounding Xperi Corporation (NASDAQ:XPER).
Hedge fund activity in Xperi Corporation (NASDAQ:XPER)
At the end of the second quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from the previous quarter. On the other hand, there were a total of 14 hedge funds with a bullish position in XPER a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Renaissance Technologies holds the largest position in Xperi Corporation (NASDAQ:XPER). Renaissance Technologies has a $34.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is D E Shaw, managed by D. E. Shaw, which holds a $30.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions consist of Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, David Brown’s Hawk Ridge Management and Ken Griffin’s Citadel Investment Group.
Because Xperi Corporation (NASDAQ:XPER) has faced a decline in interest from hedge fund managers, it’s easy to see that there was a specific group of money managers who were dropping their full holdings heading into Q3. It’s worth mentioning that Douglas T. Granat’s Trigran Investments dumped the largest investment of all the hedgies tracked by Insider Monkey, totaling an estimated $8 million in stock, and Mike Vranos’s Ellington was right behind this move, as the fund sold off about $1.1 million worth. These transactions are interesting, as total hedge fund interest dropped by 2 funds heading into Q3.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Xperi Corporation (NASDAQ:XPER) but similarly valued. These stocks are Quotient Technology Inc (NYSE:QUOT), GTT Communications Inc (NYSE:GTT), CSW Industrials, Inc. (NASDAQ:CSWI), and The Chefs Warehouse, Inc (NASDAQ:CHEF). All of these stocks’ market caps match XPER’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| QUOT | 13 | 226231 | -3 |
| GTT | 18 | 345241 | 0 |
| CSWI | 19 | 61434 | 0 |
| CHEF | 9 | 54993 | -1 |
| Average | 14.75 | 171975 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $172 million. That figure was $111 million in XPER’s case. CSW Industrials, Inc. (NASDAQ:CSWI) is the most popular stock in this table. On the other hand The Chefs Warehouse, Inc (NASDAQ:CHEF) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Xperi Corporation (NASDAQ:XPER) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately XPER wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on XPER were disappointed as the stock returned 1.5% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3.
Disclosure: None. This article was originally published at Insider Monkey.
