BofA analyst Vivek Arya has analyzed holdings of US long-only/hedge-fund active fund managers with a focus on semiconductor stocks.
Arya focused on breadth (what % of sample set owns) and depth (how much owned in portfolio relative to stocks weight in S&P 500 index) among money managers to identify stocks that could benefit from increased ownership.
Stocks with the highest ownership include Nvidia (NASDAQ:NVDA) with 51.5% of fund managers, but still below broader semis peers, which suggests there is still room for current owners to increase their exposure.
Texas Instruments (NASDAQ:TXN) is another semi stock with high ownership (39%), while relative weighting is now at lowest levels on record. Qualcomm (NASDAQ:QCOM) has the same level of ownership as TXN with a relative weighting down 25% YoY.
Additionally, Broadcom (NASDAQ:AVGO),Advanced Micro Devices Inc (NASDAQ:AMD), and Micron (NASDAQ:MU) are less owned than smaller market cap peers.
"We see opportunity for expanded ownership breadth for AVGO, AMD which, despite their large ~ $200bn+ market caps are owned by only 21%/30% of funds, respectively, below peers with smaller market caps. AVGO is owned by fewer investors but with larger weighting (concentration, 1.9x, above semis average), but AMD weighting of 0.96x is well below, so presents opportunity for greater depth also. Separately MU is owned by only 14% of funds, below similar mkt cap peers, though MUs depth of ownership of 1.21x is up the most QoQ (and 2nd most YoY) within semis," Arya said in a client note
Finally, KLA-Tencor Corporation (NASDAQ:KLAC) and Microchip (NASDAQ:MCHP) could also benefit from increased ownership.
By Senad Karaahmetovic