In this article we will check out the progression of hedge fund sentiment towards Skyworks Solutions Inc (NASDAQ:SWKS) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Skyworks Solutions Inc (NASDAQ:SWKS) investors should pay attention to a decrease in support from the world's most elite money managers in recent months. Skyworks Solutions Inc (NASDAQ:SWKS) was in 36 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 50. There were 37 hedge funds in our database with SWKS holdings at the end of June. Our calculations also showed that SWKS 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. With all of this in mind let's check out the new hedge fund action encompassing Skyworks Solutions Inc (NASDAQ:SWKS).
Ken Griffin of Citadel Investment Group
Do Hedge Funds Think SWKS Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 36 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SWKS over the last 25 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
The largest stake in Skyworks Solutions Inc (NASDAQ:SWKS) was held by Select Equity Group, which reported holding $200.7 million worth of stock at the end of September. It was followed by AQR Capital Management with a $142 million position. Other investors bullish on the company included Millennium Management, Citadel Investment Group, and Platinum Asset Management. In terms of the portfolio weights assigned to each position KCL Capital allocated the biggest weight to Skyworks Solutions Inc (NASDAQ:SWKS), around 2.28% of its 13F portfolio. Platinum Asset Management is also relatively very bullish on the stock, dishing out 1.85 percent of its 13F equity portfolio to SWKS.
Since Skyworks Solutions Inc (NASDAQ:SWKS) has witnessed declining sentiment from the aggregate hedge fund industry, it's easy to see that there were a few fund managers who were dropping their full holdings heading into Q4. It's worth mentioning that Steve Cohen's Point72 Asset Management dumped the biggest position of all the hedgies tracked by Insider Monkey, valued at an estimated $35 million in stock, and Suraj Parkash Chopra's Force Hill Capital Management was right behind this move, as the fund dumped about $15.2 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 1 funds heading into Q4.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Skyworks Solutions Inc (NASDAQ:SWKS) but similarly valued. We will take a look at Bill.com Holdings, Inc. (NYSE:BILL), Li Auto Inc. (NASDAQ:LI), Laboratory Corp. of America Holdings (NYSE:LH), UiPath Inc. (NYSE:PATH), AppLovin Corporation (NASDAQ:APP), Weyerhaeuser Co. (NYSE:WY), and Telefonica S.A. (NYSE:TEF). This group of stocks' market values resemble SWKS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BILL,65,4287204,12 LI,20,468125,0 LH,58,2706360,5 PATH,27,3629284,27 APP,24,1115983,24 WY,28,211817,-11 TEF,5,12431,1 Average,32.4,1775886,8.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.4 hedge funds with bullish positions and the average amount invested in these stocks was $1776 million. That figure was $806 million in SWKS's case. Bill.com Holdings, Inc. (NYSE:BILL) is the most popular stock in this table. On the other hand Telefonica S.A. (NYSE:TEF) is the least popular one with only 5 bullish hedge fund positions. Skyworks Solutions Inc (NASDAQ:SWKS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SWKS is 51.4. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately SWKS wasn't nearly as popular as these 5 stocks and hedge funds that were betting on SWKS were disappointed as the stock returned -7.6% since the end of September (through 11/30) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.