Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Advanced Micro Devices, Inc. (NASDAQ:AMD) to find out whether there were any major changes in hedge funds’ views.
Advanced Micro Devices, Inc. (NASDAQ:AMD) has experienced a decrease in hedge fund interest lately. Advanced Micro Devices, Inc. (NASDAQ:AMD) was in 62 hedge funds’ portfolios at the end of March. The all time high for this statistic is 74. Our calculations also showed that AMD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Donald Sussman of Paloma Partners
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Do Hedge Funds Think AMD Is A Good Stock To Buy Now?
At Q1’s end, a total of 62 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from one quarter earlier. On the other hand, there were a total of 62 hedge funds with a bullish position in AMD a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Citadel Investment Group was the largest shareholder of Advanced Micro Devices, Inc. (NASDAQ:AMD), with a stake worth $1432 million reported as of the end of March. Trailing Citadel Investment Group was Fisher Asset Management, which amassed a stake valued at $747.8 million. Arrowstreet Capital, Citadel Investment Group, and Sylebra Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Sylebra Capital Management allocated the biggest weight to Advanced Micro Devices, Inc. (NASDAQ:AMD), around 8.64% of its 13F portfolio. Andar Capital is also relatively very bullish on the stock, earmarking 7.45 percent of its 13F equity portfolio to AMD.
Seeing as Advanced Micro Devices, Inc. (NASDAQ:AMD) has experienced a decline in interest from the entirety of the hedge funds we track, we can see that there exists a select few hedge funds who sold off their positions entirely last quarter. Interestingly, Rajiv Jain’s GQG Partners dropped the largest investment of all the hedgies monitored by Insider Monkey, comprising close to $553.7 million in stock, and Andreas Halvorsen’s Viking Global was right behind this move, as the fund cut about $368.2 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 12 funds last quarter.
Let’s now review hedge fund activity in other stocks similar to Advanced Micro Devices, Inc. (NASDAQ:AMD). We will take a look at Altria Group Inc (NYSE:MO), Zoom Video Communications, Inc. (NASDAQ:ZM), Stryker Corporation (NYSE:SYK), GlaxoSmithKline plc (NYSE:GSK), Vale SA (NYSE:VALE), British American Tobacco plc (NYSE:BTI), and Anthem Inc (NYSE:ANTM). This group of stocks’ market caps resemble AMD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MO | 38 | 1109493 | 1 |
| ZM | 54 | 5672277 | -5 |
| SYK | 46 | 3154010 | 2 |
| GSK | 25 | 1359731 | -5 |
| VALE | 31 | 2615665 | -4 |
| BTI | 14 | 1034777 | 4 |
| ANTM | 58 | 5373054 | -12 |
| Average | 38 | 2902715 | -2.7 |
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 $2903 million. That figure was $3703 million in AMD’s case. Anthem Inc (NYSE:ANTM) is the most popular stock in this table. On the other hand British American Tobacco plc (NYSE:BTI) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Advanced Micro Devices, Inc. (NASDAQ:AMD) is more popular among hedge funds. Our overall hedge fund sentiment score for AMD is 68.1. 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 returned 25.8% in 2021 through August 6th but still managed to beat the market by 6.7 percentage points. Hedge funds were also right about betting on AMD as the stock returned 40.3% since the end of March (through 8/6) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
