In this article we will check out the progression of hedge fund sentiment towards Keysight Technologies Inc (NYSE:KEYS) 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 Keysight Technologies Inc (NYSE:KEYS) the right pick for your portfolio? The smart money was selling. The number of bullish hedge fund positions were cut by 2 in recent months. Keysight Technologies Inc (NYSE:KEYS) was in 30 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 50. Our calculations also showed that KEYS 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 let’s analyze the fresh hedge fund action surrounding Keysight Technologies Inc (NYSE:KEYS).
Bruce Kovner of Caxton Associates LP
Do Hedge Funds Think KEYS Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from one quarter earlier. On the other hand, there were a total of 36 hedge funds with a bullish position in KEYS a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Keysight Technologies Inc (NYSE:KEYS) was held by Arrowstreet Capital, which reported holding $265.5 million worth of stock at the end of September. It was followed by Ariel Investments with a $86.1 million position. Other investors bullish on the company included Giverny Capital, D E Shaw, and AQR Capital Management. In terms of the portfolio weights assigned to each position Giverny Capital allocated the biggest weight to Keysight Technologies Inc (NYSE:KEYS), around 4.22% of its 13F portfolio. Claar Advisors is also relatively very bullish on the stock, earmarking 2.44 percent of its 13F equity portfolio to KEYS.
Because Keysight Technologies Inc (NYSE:KEYS) has faced a decline in interest from hedge fund managers, it’s safe to say that there lies a certain “tier” of hedge funds that slashed their full holdings by the end of the third quarter. Intriguingly, Ray Dalio’s Bridgewater Associates cut the biggest stake of the “upper crust” of funds followed by Insider Monkey, valued at about $9.3 million in stock. Renaissance Technologies, also sold off its stock, about $7.6 million worth. These transactions are interesting, as total hedge fund interest fell by 2 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Keysight Technologies Inc (NYSE:KEYS). We will take a look at Sun Life Financial Inc. (NYSE:SLF), D.R. Horton, Inc. (NYSE:DHI), The Kroger Co. (NYSE:KR), Ameriprise Financial, Inc. (NYSE:AMP), Willis Towers Watson Public Limited Company (NASDAQ:WLTW), Garmin Ltd. (NYSE:GRMN), and TELUS Corporation (NYSE:TU). This group of stocks’ market valuations resemble KEYS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SLF | 8 | 81688 | -3 |
| DHI | 51 | 2184785 | 6 |
| KR | 39 | 3919870 | 0 |
| AMP | 40 | 1309163 | 3 |
| WLTW | 75 | 5055019 | 5 |
| GRMN | 30 | 465208 | 5 |
| TU | 12 | 141291 | -1 |
| Average | 36.4 | 1879575 | 2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 36.4 hedge funds with bullish positions and the average amount invested in these stocks was $1880 million. That figure was $675 million in KEYS’s case. Willis Towers Watson Public Limited Company (NASDAQ:WLTW) is the most popular stock in this table. On the other hand Sun Life Financial Inc. (NYSE:SLF) is the least popular one with only 8 bullish hedge fund positions. Keysight Technologies Inc (NYSE:KEYS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KEYS is 37.4. 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 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 still beat the market by 5.6 percentage points. A small number of hedge funds were also right about betting on KEYS as the stock returned 18.4% since the end of the third quarter (through 11/30) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
