Billionaire hedge fund managers such as David Abrams, Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Xilinx, Inc. (NASDAQ:XLNX) was in 48 hedge funds’ portfolios at the end of December. XLNX investors should be aware of an increase in support from the world’s most elite money managers in recent months. There were 36 hedge funds in our database with XLNX holdings at the end of the previous quarter. Our calculations also showed that XLNX isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s go over the key hedge fund action encompassing Xilinx, Inc. (NASDAQ:XLNX).
What does the smart money think about Xilinx, Inc. (NASDAQ:XLNX)?
At Q4’s end, a total of 48 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the second quarter of 2018. On the other hand, there were a total of 30 hedge funds with a bullish position in XLNX 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, Blue Harbour Group, managed by Clifton S. Robbins, holds the largest position in Xilinx, Inc. (NASDAQ:XLNX). Blue Harbour Group has a $183.1 million position in the stock, comprising 9.8% of its 13F portfolio. Sitting at the No. 2 spot is Panayotis Takis Sparaggis of Alkeon Capital Management, with a $179.5 million position; 1.2% of its 13F portfolio is allocated to the stock. Other peers that are bullish comprise Josh Resnick’s Jericho Capital Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors and Israel Englander’s Millennium Management.
As aggregate interest increased, some big names were leading the bulls’ herd. Columbus Circle Investors, managed by Principal Global Investors, created the biggest position in Xilinx, Inc. (NASDAQ:XLNX). Columbus Circle Investors had $30.5 million invested in the company at the end of the quarter. John Hurley’s Cavalry Asset Management also made a $30.1 million investment in the stock during the quarter. The other funds with brand new XLNX positions are Neal Nathani and Darren Dinneen’s Totem Point Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Spencer M. Waxman’s Shannon River Fund Management.
Let’s go over hedge fund activity in other stocks similar to Xilinx, Inc. (NASDAQ:XLNX). These stocks are CRH PLC (NYSE:CRH), Dollar Tree, Inc. (NASDAQ:DLTR), Agilent Technologies Inc. (NYSE:A), and Cummins Inc. (NYSE:CMI). This group of stocks’ market values match XLNX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CRH | 8 | 49486 | 1 |
| DLTR | 53 | 2163297 | 0 |
| A | 40 | 1976098 | 0 |
| CMI | 35 | 584133 | 3 |
| Average | 34 | 1193254 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34 hedge funds with bullish positions and the average amount invested in these stocks was $1193 million. That figure was $1157 million in XLNX’s case. Dollar Tree, Inc. (NASDAQ:DLTR) is the most popular stock in this table. On the other hand CRH PLC (NYSE:CRH) is the least popular one with only 8 bullish hedge fund positions. Xilinx, Inc. (NASDAQ:XLNX) is not the most popular stock in this group but hedge fund interest is still above average and sits at its all time high. Hedge funds have never been more bullish on this stock. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Hedge funds were also right about betting on Xilinx as the stock returned 46.3% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
