Zebra Technologies Corp. (ZBRA): Are Hedge Funds Right About This Stock?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Zebra Technologies Corp. (NASDAQ:ZBRA) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Zebra Technologies Corp. (NASDAQ:ZBRA) has seen an increase in hedge fund interest recently. ZBRA was in 32 hedge funds’ portfolios at the end of the third quarter of 2015. There were 27 hedge funds in our database with ZBRA positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Echostar Corporation (NASDAQ:SATS), Reliance Steel & Aluminum (NYSE:RS), and Tesoro Logistics LP (NYSE:TLLP) to gather more data points.

To most investors, hedge funds are viewed as unimportant, old financial tools of years past. While there are more than 8000 funds trading at present, Our researchers choose to focus on the aristocrats of this club, approximately 700 funds. Most estimates calculate that this group of people command most of all hedge funds’ total asset base, and by keeping an eye on their inimitable investments, Insider Monkey has figured out numerous investment strategies that have historically beaten Mr. Market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points a year for a decade in their back tests.

With all of this in mind, we’re going to take a look at the latest action encompassing Zebra Technologies Corp. (NASDAQ:ZBRA).

How have hedgies been trading Zebra Technologies Corp. (NASDAQ:ZBRA)?

At Q3’s end, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 19% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, OZ Management, managed by Daniel S. Och, holds the largest position in Zebra Technologies Corp. (NASDAQ:ZBRA). In its latest 13F filing, the fund has reported a $187.5 million position in the stock, comprising 0.7% of its 13F portfolio. The second largest stake is held by Brookside Capital, led by Bain Capital, holding a $67 million position; the fund has 2% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism encompass Richard Barrera’s Roystone Capital Partners, Josh Resnick’s Jericho Capital Asset Management and Chuck Royce’s Royce & Associates.

As industrywide interest jumped, key money managers have been driving this bullishness. Segantii Capital, managed by Simon Sadler, assembled the biggest position in Zebra Technologies Corp. (NASDAQ:ZBRA), worth an estimated $7.2 million at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $3.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Neil Chriss’s Hutchin Hill Capital, Paul Marshall and Ian Wace’s Marshall Wace LLP, and D. E. Shaw’s D E Shaw.

Let’s check out hedge fund activity in other stocks similar to Zebra Technologies Corp. (NASDAQ:ZBRA). We will take a look at Echostar Corporation (NASDAQ:SATS), Reliance Steel & Aluminum (NYSE:RS), Tesoro Logistics LP (NYSE:TLLP), and Copart, Inc. (NASDAQ:CPRT). This group of stocks’ market valuations resemble ZBRA’s market valuation.

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $385 million. That figure was $653 million in ZBRA’s case. Copart, Inc. (NASDAQ:CPRT) is the most popular stock in this table. On the other hand Tesoro Logistics LP (NYSE:TLLP) is the least popular one with only 9 bullish hedge fund positions. Zebra Technologies Corp. (NASDAQ:ZBRA) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CPRT might be a better candidate to consider a long position.