Is Intel Corporation (NASDAQ:INTC) ready to rally soon? Hedge funds were buying. The number of long hedge fund positions went up by 5 lately. Intel Corporation (NASDAQ:INTC) was in 78 hedge funds’ portfolios at the end of June. The all time high for this statistics is 73. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that INTC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ken Fisher of Fisher Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than quadrupled this year. We are trying to identify other EV revolution winners, so we are checking out this under-the-radar lithium stock. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. With all of this in mind we’re going to check out the latest hedge fund action surrounding Intel Corporation (NASDAQ:INTC).
How are hedge funds trading Intel Corporation (NASDAQ:INTC)?
At the end of the second quarter, a total of 78 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from the previous quarter. The graph below displays the number of hedge funds with bullish position in INTC over the last 20 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Ken Fisher’s Fisher Asset Management has the number one position in Intel Corporation (NASDAQ:INTC), worth close to $1.7151 billion, corresponding to 1.7% of its total 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $1.0133 billion position; the fund has 1.9% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism comprise Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position MFP Investors allocated the biggest weight to Intel Corporation (NASDAQ:INTC), around 22.48% of its 13F portfolio. EMS Capital is also relatively very bullish on the stock, dishing out 5.93 percent of its 13F equity portfolio to INTC.
As industrywide interest jumped, some big names have jumped into Intel Corporation (NASDAQ:INTC) headfirst. Atreides Management, managed by Gavin Baker, initiated the biggest position in Intel Corporation (NASDAQ:INTC). Atreides Management had $25.4 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also made a $6.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Jinghua Yan’s TwinBeech Capital, Robert Joseph Caruso’s Select Equity Group, and Zach Schreiber’s Point State Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Intel Corporation (NASDAQ:INTC) but similarly valued. We will take a look at NVIDIA Corporation (NASDAQ:NVDA), Verizon Communications Inc. (NYSE:VZ), AT&T Inc. (NYSE:T), Adobe Inc. (NASDAQ:ADBE), Bank of America Corporation (NYSE:BAC), Paypal Holdings Inc (NASDAQ:PYPL), and The Walt Disney Company (NYSE:DIS). This group of stocks’ market caps are similar to INTC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NVDA | 92 | 5548398 | -3 |
| VZ | 68 | 2973925 | 0 |
| T | 57 | 1659928 | 0 |
| ADBE | 104 | 9651462 | -11 |
| BAC | 91 | 24357766 | -4 |
| PYPL | 144 | 11406883 | 26 |
| DIS | 105 | 6819839 | 3 |
| Average | 94.4 | 8916886 | 1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 94.4 hedge funds with bullish positions and the average amount invested in these stocks was $8917 million. That figure was $6480 million in INTC’s case. Paypal Holdings Inc (NASDAQ:PYPL) is the most popular stock in this table. On the other hand AT&T Inc. (NYSE:T) is the least popular one with only 57 bullish hedge fund positions. Intel Corporation (NASDAQ:INTC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for INTC is 52.1. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 29.2% in 2020 through October 16th and surpassed the market by 19.7 percentage points. Unfortunately INTC wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); INTC investors were disappointed as the stock returned -8.9% since the end of June (through 10/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
