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 Sanmina Corporation (NASDAQ:SANM).
Is Sanmina Corporation (NASDAQ:SANM) the right investment to pursue these days? Prominent investors were getting more optimistic. The number of long hedge fund bets moved up by 5 recently. Sanmina Corporation (NASDAQ:SANM) was in 21 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 23. Our calculations also showed that SANM isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 16 hedge funds in our database with SANM positions at the end of the first quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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Do Hedge Funds Think SANM Is A Good Stock To Buy Now?
At the end of June, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 31% from the previous quarter. On the other hand, there were a total of 20 hedge funds with a bullish position in SANM a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
More specifically, Diamond Hill Capital was the largest shareholder of Sanmina Corporation (NASDAQ:SANM), with a stake worth $40.9 million reported as of the end of June. Trailing Diamond Hill Capital was Arrowstreet Capital, which amassed a stake valued at $26.3 million. Royce & Associates, D E Shaw, and Renaissance Technologies 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 Invenomic Capital Management allocated the biggest weight to Sanmina Corporation (NASDAQ:SANM), around 0.27% of its 13F portfolio. Diamond Hill Capital is also relatively very bullish on the stock, dishing out 0.16 percent of its 13F equity portfolio to SANM.
Now, specific money managers were leading the bulls' herd. Tudor Investment Corp, managed by Paul Tudor Jones, initiated the largest position in Sanmina Corporation (NASDAQ:SANM). Tudor Investment Corp had $3.2 million invested in the company at the end of the quarter. Michael Gelband's ExodusPoint Capital also initiated a $1.2 million position during the quarter. The following funds were also among the new SANM investors: Mika Toikka's AlphaCrest Capital Management, Matthew Hulsizer's PEAK6 Capital Management, and Qing Li's Sciencast Management.
Let's also examine hedge fund activity in other stocks similar to Sanmina Corporation (NASDAQ:SANM). We will take a look at Arbor Realty Trust, Inc. (NYSE:ABR), Axsome Therapeutics, Inc. (NASDAQ:AXSM), Sinopec Shanghai Petrochemical Co. (NYSE:SHI), Micro Focus Intl PLC (NYSE:MFGP), The Duckhorn Portfolio, Inc. (NYSE:NAPA), MorphoSys AG (NASDAQ:MOR), and Methanex Corporation (NASDAQ:MEOH). All of these stocks' market caps resemble SANM's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ABR,18,109314,-3 AXSM,17,430244,0 SHI,5,13771,1 MFGP,7,13496,0 NAPA,16,120355,-2 MOR,2,6487,0 MEOH,16,65938,0 Average,11.6,108515,-0.6 [/table]
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 $109 million. That figure was $129 million in SANM's case. Arbor Realty Trust, Inc. (NYSE:ABR) is the most popular stock in this table. On the other hand MorphoSys AG (NASDAQ:MOR) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Sanmina Corporation (NASDAQ:SANM) is more popular among hedge funds. Our overall hedge fund sentiment score for SANM is 87.4. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Unfortunately SANM wasn't nearly as popular as these 5 stocks and hedge funds that were betting on SANM were disappointed as the stock returned -2.6% 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.
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Disclosure: None. This article was originally published at Insider Monkey.