Published on 23 Oct 2021 on Insider Monkey via Yahoo Finance

Was The Smart Money Right About Piling Into ON Semiconductor (ON)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 887 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of December 31st. In this article we look at what those investors think of ON Semiconductor Corporation (NASDAQ:ON).

Is ON Semiconductor Corporation (NASDAQ:ON) a marvelous investment right now? Hedge funds were becoming more confident. The number of bullish hedge fund positions moved up by 16 lately. ON Semiconductor Corporation (NASDAQ:ON) was in 45 hedge funds' portfolios at the end of December. The all time high for this statistic was previously 39. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ON isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 29 hedge funds in our database with ON positions at the end of the third quarter.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.