Texas Instruments Incorporated (TXN) Hedge Funds Are Snapping Up

We, at Insider Monkey, have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article we look at what those investors think of Texas Instruments Incorporated (NASDAQ:TXN).

Is Texas Instruments Incorporated (NASDAQ:TXN) a cheap stock to buy now? Investors who are in the know are in a bullish mood. The number of bullish hedge fund bets advanced by 2 in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as BHP Billiton Limited (ADR) (NYSE:BHP), Time Warner Cable Inc (NYSE:TWC), and Occidental Petroleum Corporation (NYSE:OXY) to gather more data points.

In the eyes of most stock holders, hedge funds are assumed to be unimportant, old investment vehicles of the past. While there are over 8000 funds trading at present, we choose to focus on the elite of this group, around 700 funds. These investment experts control the bulk of the smart money’s total asset base, and by monitoring their first-class picks, Insider Monkey has spotted a few investment strategies that have historically surpassed the broader indices. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per year for a decade in their back tests.

With all of this in mind, we’re going to take a glance at the latest action encompassing Texas Instruments Incorporated (NASDAQ:TXN).

How are hedge funds trading Texas Instruments Incorporated (NASDAQ:TXN)?

At the end of Q3, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 6% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, D E Shaw has the most valuable position in Texas Instruments Incorporated (NASDAQ:TXN), worth close to $81.5 million, corresponding to 0.1% of its total 13F portfolio. The second largest stake is held by Winton Capital Management, managed by David Harding, which holds a $77.7 million position; 0.6% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish comprise Wallace Weitz’s Wallace R. Weitz & Co., John Overdeck and David Siegel’s Two Sigma Advisors, and Cliff Asness’ AQR Capital Management.

With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Millennium Management, managed by Israel Englander, established the biggest CALL position in Texas Instruments Incorporated (NASDAQ:TXN). Millennium Management had $29.7 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $17.8 million position during the quarter. The following funds were also among the new TXN investors: Daniel Benton’s Andor Capital Management, and Louis Bacon’s Moore Global Investments.

Let’s now take a look at hedge fund activity in other stocks similar to Texas Instruments Incorporated (NASDAQ:TXN). We will take a look at BHP Billiton Limited (ADR) (NYSE:BHP), Time Warner Cable Inc (NYSE:TWC), Occidental Petroleum Corporation (NYSE:OXY), and Enterprise Products Partners L.P. (NYSE:EPD). All of these stocks’ market caps match Texas Instruments Incorporated (NASDAQ:TXN)’s market cap.

As you can see, these stocks had an average of 48 hedge funds with bullish positions and the average amount invested in these stocks was $4.47 billion. That figure was $710 million in Texas Instruments Incorporated (NASDAQ:TXN)’s case. Time Warner Cable Inc (NYSE:TWC) is the most popular stock in this table. On the other hand, BHP Billiton Limited (ADR) (NYSE:BHP) is the least popular one with only 20 bullish hedge fund positions. Texas Instruments Incorporated (NASDAQ:TXN) 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, Time Warner Cable Inc (NYSE:TWC) might be a better candidate to consider a long position.