Should I Avoid Micron Technology, Inc. (MU)?

The most recent 13F reporting period has come and gone, and Insider Monkey is back on top when it comes to leveraging this goldmine of data. We have processed the filings of the more than 873 top investment firms that we track and now have access to the aggregated insights of these filings, based on their holdings as of June 30, data not available anywhere else. Should you be Micron Technology, Inc. (NASDAQ:MU) for your portfolio? We will use this invaluable collective wisdom to answer.

is Micron Technology, Inc. (NASDAQ:MU) is it going to start soon? Knowing investors became less optimistic. The number of bullish hedge fund positions has been reduced by 13 in the past few months. Micron Technology, Inc. (NASDAQ:MU) was in 87 hedge fund portfolios at the end of the second quarter of 2021. The all-time high of this statistic is 100. Our calculations also showed that MU is in 30th place in the The 30 most popular stocks among hedge funds (Click for the Q2 ranking).

So why do we pay attention to hedge fund sentiment before making investment decisions? Our research has shown that hedge fund small-cap stock selection beat the market by double digits annually between 1999 and 2016, but the outperformance margin has been decreasing in recent years. Nevertheless, we were able to identify a selected group of hedge fund holdings in advance that exceeded the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the movements of corporate insiders and hedge funds, and we believe retail investors can benefit greatly from reading hedge fund investor letters and 13F filings.

Seth Klarman from the Baupost Group

Seth Klarman from the Baupost Group

Seth Klarman from the Baupost Group

At Insider Monkey, we search multiple sources to discover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we look at such stock prices emerging lithium stock. We go lists like 10. by best EV stocks to pick the next Tesla that delivers a 10x return. While we recommend positions in just a tiny fraction of the companies we analyze, we review as many stocks as possible. We read letters from hedge fund investors and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a look at the top hedge fund actions regarding Micron Technology, Inc. (NASDAQ:MU).

Do hedge funds think MU is a good stock to buy now?

At the end of the second quarter, a total of 87 hedge funds tracked by Insider Monkey were long in this stock, a change of -13% from the previous quarter. On the other hand, a year ago there were a total of 84 hedge funds with a bullish position in MU. Given the swirling sentiment in hedge funds, there are some notable hedge fund managers who have added significantly (or have already built large positions) their stakes.

Among these funds, Arrowstreet capital held its most valuable stake in Micron Technology, Inc. (NASDAQ: MU), valued at $ 1,262.8 million at the end of the second quarter. Second was Baupost Group, which amassed $ 608.7 million in shares. Citadel Investment Group, Appaloosa Management LP, and Matrix Capital Management were also very enthusiastic about the stock and became one of the company’s largest hedge fund owners. In terms of the portfolio weights assigned to each position, Mohnish Pabrai assigned the largest weight to Micron Technology, Inc. (NASDAQ: MU), at approximately 47.5% of its 13F portfolio. Pennant Capital Management is also relatively bullish on the stock and earmarked 14.26 percent of its 13F stock portfolio in MU.

Since Micron Technology, Inc. (NASDAQ: MU) has seen bearish sentiment from smart money, we can see that there are a select few funds that completely abandoned their positions by the end of the second quarter. At the top of the pile, Gabriel Plotkins Melvin Capital Management lost the largest portion of the 750 funds monitored by Insider Monkey with a share value of approximately $ 110.3 million, and Richard Driehaus’s Driehaus Capital was right behind that move, as the fund was valued at approximately $ 75.5 million submitted. These bearish behaviors are important as overall interest in hedge funds fell by 13 funds by the end of the second quarter.

Let’s also examine hedge fund activity in other stocks similar to Micron Technology, Inc. (NASDAQ: MU). We will become Moderna, Inc. (NASDAQ:MRNA), Uber Technologies, Inc. (NYSE:ABOVE), Anthem Inc (NYSE:ANTME), Lam Research Corporation (NASDAQ:LRCX), Airbnb, Inc. (NASDAQ:ABNB), British American Tobacco plc (NYSE:BTI) and Infosys Limited (NYSE:INFY). The market capitalization of this group of stocks is similar to the market capitalization of MU.

[table] Ticker, number of HRs with positions, total value of HR positions (x1000), change of HR position MRNA, 37.5754554, -2 UBER, 135.10412577.5 ANTM, 67.4838358.9 LRCX, 58.3719258.4 ABNB, 58.2711062.6 BTI , 12.1011787, -2 INFY, 22.2158547, -4 average, 55.64372306.2.3 [/table]

See table here when formatting problems occur.

As you can see, these stocks averaged 55.6 hedge funds with bullish positions and the average amount invested in these stocks was $ 4,372 million. That figure was $ 6,333 million in the case of MU. Uber Technologies, Inc. (NYSE:ABOVE) is the most popular stock in this table. On the other hand, British American Tobacco plc (NYSE:BTI) is the least popular, with only 12 bullish hedge fund positions. Micron Technology, Inc. (NASDAQ: MU) isn’t the most popular stock in this group, but interest in hedge funds is still above average. Our hedge fund sentiment score for MU is 48.6. Stocks with a higher number of hedge fund positions relative to other stocks and relative to their historical range receive a higher sentiment score. This is a slightly positive sign, but we prefer to spend our time researching stocks that hedge funds are piling up on. Our calculations have shown that Top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, outperforming the S&P 500 ETF (SPY) by 40 percentage points. Those stocks gained 24.1% through September 20 in 2021, again beating the market 6.9 percentage points. Unfortunately, MU wasn’t nearly as popular as those 5 stocks and hedge funds that bet on MU were disappointed as the stock returned -14.8% since late June (through September 20th), trailing the market. If you’re interested in investing in large-cap stocks with big upside potential, this is the place to go Top 5 most popular stocks among hedge funds, as many of these stocks have already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider monkey.