Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Keysight Technologies Inc (NYSE:KEYS) based on that data and determine whether they were really smart about the stock.
Keysight Technologies Inc (NYSE:KEYS) investors should pay attention to a decrease in hedge fund interest lately. 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. There were 32 hedge funds in our database with KEYS holdings at the end of June. 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. Now we’re going to review the fresh hedge fund action surrounding Keysight Technologies Inc (NYSE:KEYS).
John Rogers of Ariel Investments
Do Hedge Funds Think KEYS Is A Good Stock To Buy Now?
At the end of September, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the previous quarter. On the other hand, there were a total of 36 hedge funds with a bullish position in KEYS a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Arrowstreet Capital was the largest shareholder of Keysight Technologies Inc (NYSE:KEYS), with a stake worth $265.5 million reported as of the end of September. Trailing Arrowstreet Capital was Ariel Investments, which amassed a stake valued at $86.1 million. Giverny Capital, D E Shaw, and AQR 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 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, dishing out 2.44 percent of its 13F equity portfolio to KEYS.
Judging by the fact that Keysight Technologies Inc (NYSE:KEYS) has faced a decline in interest from hedge fund managers, we can see that there lies a certain “tier” of hedgies that decided to sell off their full holdings in the third quarter. Intriguingly, Ray Dalio’s Bridgewater Associates said goodbye to the largest investment of the “upper crust” of funds followed by Insider Monkey, totaling close to $9.3 million in stock, and Renaissance Technologies was right behind this move, as the fund dumped about $7.6 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 2 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Keysight Technologies Inc (NYSE:KEYS) but similarly valued. 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 29.6% in 2021 and still managed to beat the market by another 3.6 percentage points. Hedge funds were somewhat right about betting on KEYS as the stock returned 2.8% since the end of September (through January 31st) and outperformed the top 5 hedge fund stocks but not the market. This is a rare phenomenon as top hedge fund stocks usually beat the market over the long-term.
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Disclosure: None. This article was originally published at Insider Monkey.
