After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Super Micro Computer, Inc. (NASDAQ:SMCI).
Super Micro Computer, Inc. (NASDAQ:SMCI) investors should pay attention to a decrease in hedge fund interest lately. Super Micro Computer, Inc. (NASDAQ:SMCI) was in 20 hedge funds’ portfolios at the end of June. The all time high for this statistic is 24. Our calculations also showed that SMCI isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Richard S. Pzena of Pzena Investment Management
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Do Hedge Funds Think SMCI Is A Good Stock To Buy Now?
At the end of June, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SMCI over the last 24 quarters. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
Among these funds, Oaktree Capital Management held the most valuable stake in Super Micro Computer, Inc. (NASDAQ:SMCI), which was worth $79.6 million at the end of the second quarter. On the second spot was Empyrean Capital Partners which amassed $70.1 million worth of shares. Hawk Ridge Management, Madison Avenue Partners, and Pzena Investment 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 Madison Avenue Partners allocated the biggest weight to Super Micro Computer, Inc. (NASDAQ:SMCI), around 19.17% of its 13F portfolio. Hawk Ridge Management is also relatively very bullish on the stock, earmarking 4.65 percent of its 13F equity portfolio to SMCI.
Seeing as Super Micro Computer, Inc. (NASDAQ:SMCI) has witnessed bearish sentiment from the smart money, logic holds that there lies a certain “tier” of money managers that decided to sell off their full holdings by the end of the second quarter. At the top of the heap, Brandon Haley’s Holocene Advisors cut the biggest position of the 750 funds monitored by Insider Monkey, totaling about $0.9 million in stock. Noam Gottesman’s fund, GLG Partners, also dropped its stock, about $0.3 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 1 funds by the end of the second quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Super Micro Computer, Inc. (NASDAQ:SMCI) but similarly valued. These stocks are Viant Technology Inc. (NASDAQ:DSP), Hope Bancorp, Inc. (NASDAQ:HOPE), Veritex Holdings Inc (NASDAQ:VBTX), Applied Molecular Transport Inc. (NASDAQ:AMTI), Avanos Medical (NYSE:AVNS), Steelcase Inc. (NYSE:SCS), and CBIZ, Inc. (NYSE:CBZ). This group of stocks’ market valuations match SMCI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DSP | 6 | 12575 | -8 |
| HOPE | 16 | 78597 | 3 |
| VBTX | 9 | 38993 | 3 |
| AMTI | 3 | 3167 | 0 |
| AVNS | 16 | 218001 | 3 |
| SCS | 16 | 137320 | -3 |
| CBZ | 15 | 236657 | 2 |
| Average | 11.6 | 103616 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.6 hedge funds with bullish positions and the average amount invested in these stocks was $104 million. That figure was $374 million in SMCI’s case. Hope Bancorp, Inc. (NASDAQ:HOPE) is the most popular stock in this table. On the other hand Applied Molecular Transport Inc. (NASDAQ:AMTI) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Super Micro Computer, Inc. (NASDAQ:SMCI) is more popular among hedge funds. Our overall hedge fund sentiment score for SMCI is 79. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Unfortunately SMCI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SMCI were disappointed as the stock returned 0.3% since the end of the second quarter (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Super Micro Computer Inc. (NASDAQ:SMCI)
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Disclosure: None. This article was originally published at Insider Monkey.
