The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th. We at Insider Monkey have made an extensive database of more than 867 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded KLA Corporation (NASDAQ:KLAC) based on those filings.
KLA Corporation (NASDAQ:KLAC) was in 44 hedge funds’ portfolios at the end of September. The all time high for this statistic is 46. KLAC has experienced a decrease in hedge fund interest lately. There were 45 hedge funds in our database with KLAC holdings at the end of June. Our calculations also showed that KLAC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Cliff Asness of AQR Capital Management
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. With all of this in mind let’s go over the fresh hedge fund action encompassing KLA Corporation (NASDAQ:KLAC).
Do Hedge Funds Think KLAC Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 44 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -2% from the second quarter of 2021. On the other hand, there were a total of 33 hedge funds with a bullish position in KLAC a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Panayotis Takis Sparaggis’s Alkeon Capital Management has the biggest position in KLA Corporation (NASDAQ:KLAC), worth close to $551.6 million, accounting for 0.9% of its total 13F portfolio. Coming in second is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $274.3 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Brandon Haley’s Holocene Advisors, Ken Griffin’s Citadel Investment Group and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Force Hill Capital Management allocated the biggest weight to KLA Corporation (NASDAQ:KLAC), around 4.75% of its 13F portfolio. Breakline Capital is also relatively very bullish on the stock, setting aside 3.58 percent of its 13F equity portfolio to KLAC.
Since KLA Corporation (NASDAQ:KLAC) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few hedgies that slashed their positions entirely by the end of the third quarter. Intriguingly, Ray Dalio’s Bridgewater Associates dumped the biggest position of the 750 funds watched by Insider Monkey, valued at an estimated $13 million in stock. Donald Sussman’s fund, Paloma Partners, also said goodbye to its stock, about $2.8 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 1 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as KLA Corporation (NASDAQ:KLAC) but similarly valued. We will take a look at DocuSign, Inc. (NASDAQ:DOCU), MSCI Inc (NYSE:MSCI), Canadian Imperial Bank of Commerce (NYSE:CM), Humana Inc (NYSE:HUM), Marvell Technology Group Ltd. (NASDAQ:MRVL), Dollar General Corp. (NYSE:DG), and Banco Santander (Brasil) SA (NYSE:BSBR). This group of stocks’ market caps are similar to KLAC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DOCU | 51 | 4238147 | -7 |
| MSCI | 43 | 997992 | 6 |
| CM | 13 | 289714 | -2 |
| HUM | 60 | 2900740 | 1 |
| MRVL | 45 | 1152936 | -6 |
| DG | 46 | 1905639 | 1 |
| BSBR | 8 | 10442 | 1 |
| Average | 38 | 1642230 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 38 hedge funds with bullish positions and the average amount invested in these stocks was $1642 million. That figure was $1844 million in KLAC’s case. Humana Inc (NYSE:HUM) is the most popular stock in this table. On the other hand Banco Santander (Brasil) SA (NYSE:BSBR) is the least popular one with only 8 bullish hedge fund positions. KLA Corporation (NASDAQ:KLAC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KLAC is 67.3. 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. Hedge funds were also right about betting on KLAC as the stock returned 22.3% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
