While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Juniper Networks, Inc. (NYSE:JNPR).
Juniper Networks, Inc. (NYSE:JNPR) was in 26 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 41. JNPR investors should pay attention to a decrease in support from the world's most elite money managers of late. There were 27 hedge funds in our database with JNPR holdings at the end of June. Our calculations also showed that JNPR 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. Keeping this in mind we're going to go over the latest hedge fund action encompassing Juniper Networks, Inc. (NYSE:JNPR).
Richard S. Pzena of Pzena Investment Management
Do Hedge Funds Think JNPR Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. On the other hand, there were a total of 30 hedge funds with a bullish position in JNPR a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Point72 Asset Management was the largest shareholder of Juniper Networks, Inc. (NYSE:JNPR), with a stake worth $91.4 million reported as of the end of September. Trailing Point72 Asset Management was Pzena Investment Management, which amassed a stake valued at $53.7 million. Two Sigma Advisors, LMR Partners, and Woodline Partners 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 Quantinno Capital allocated the biggest weight to Juniper Networks, Inc. (NYSE:JNPR), around 0.71% of its 13F portfolio. Neo Ivy Capital is also relatively very bullish on the stock, earmarking 0.51 percent of its 13F equity portfolio to JNPR.
Since Juniper Networks, Inc. (NYSE:JNPR) has experienced bearish sentiment from the smart money, logic holds that there were a few funds that elected to cut their positions entirely in the third quarter. Intriguingly, Ken Griffin's Citadel Investment Group dumped the biggest position of the "upper crust" of funds watched by Insider Monkey, valued at about $64.7 million in stock. Renaissance Technologies, also dumped its stock, about $23.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds in the third quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Juniper Networks, Inc. (NYSE:JNPR) but similarly valued. These stocks are Oatly Group AB (NASDAQ:OTLY), Dolby Laboratories, Inc. (NYSE:DLB), Genpact Limited (NYSE:G), UGI Corp (NYSE:UGI), Lamb Weston Holdings, Inc. (NYSE:LW), Anaplan, Inc. (NYSE:PLAN), and SiteOne Landscape Supply, Inc. (NYSE:SITE). This group of stocks' market caps resemble JNPR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OTLY,13,136864,-6 DLB,33,521159,2 G,24,299354,2 UGI,20,128595,-3 LW,31,426705,-5 PLAN,61,2812127,9 SITE,15,120291,-10 Average,28.1,635014,-1.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.1 hedge funds with bullish positions and the average amount invested in these stocks was $635 million. That figure was $288 million in JNPR's case. Anaplan, Inc. (NYSE:PLAN) is the most popular stock in this table. On the other hand Oatly Group AB (NASDAQ:OTLY) is the least popular one with only 13 bullish hedge fund positions. Juniper Networks, Inc. (NYSE:JNPR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for JNPR is 36.6. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. A small number of hedge funds were also right about betting on JNPR as the stock returned 19.7% since the end of the third quarter (through 12/9) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.