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Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Coursera, Inc. (NYSE:COUR), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is COUR a good stock to buy? Prominent investors were getting more optimistic. The number of bullish hedge fund positions rose by 25 in recent months. Coursera, Inc. (NYSE:COUR) was in 25 hedge funds' portfolios at the end of March. Our calculations also showed that COUR isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Glen Kacher of Light Street Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let's analyze the recent hedge fund action regarding Coursera, Inc. (NYSE:COUR).
Do Hedge Funds Think COUR Is A Good Stock To Buy Now?
At the end of March, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25 from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in COUR a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Light Street Capital held the most valuable stake in Coursera, Inc. (NYSE:COUR), which was worth $25.2 million at the end of the fourth quarter. On the second spot was Millennium Management which amassed $14.3 million worth of shares. Adage Capital Management, Citadel Investment Group, and Alyeska Investment Group 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 Light Street Capital allocated the biggest weight to Coursera, Inc. (NYSE:COUR), around 1.35% of its 13F portfolio. Alyeska Investment Group is also relatively very bullish on the stock, setting aside 0.12 percent of its 13F equity portfolio to COUR.
As one would reasonably expect, key hedge funds have been driving this bullishness. Light Street Capital, managed by Glen Kacher, initiated the largest position in Coursera, Inc. (NYSE:COUR). Light Street Capital had $25.2 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $14.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Phill Gross and Robert Atchinson's Adage Capital Management, Ken Griffin's Citadel Investment Group, and Anand Parekh's Alyeska Investment Group.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Coursera, Inc. (NYSE:COUR) but similarly valued. These stocks are Cimarex Energy Co (NYSE:XEC), Allakos Inc. (NASDAQ:ALLK), Nexstar Media Group, Inc. (NASDAQ:NXST), loanDepot, Inc. (NYSE:LDI), Gildan Activewear Inc (NYSE:GIL), Saia Inc (NASDAQ:SAIA), and Leggett & Platt, Inc. (NYSE:LEG). This group of stocks' market caps resemble COUR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position XEC,39,775009,5 ALLK,13,456292,2 NXST,35,945735,-9 LDI,6,8347,6 GIL,17,643419,0 SAIA,16,420526,0 LEG,24,83229,4 Average,21.4,476080,1.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.4 hedge funds with bullish positions and the average amount invested in these stocks was $476 million. That figure was $120 million in COUR's case. Cimarex Energy Co (NYSE:XEC) is the most popular stock in this table. On the other hand loanDepot, Inc. (NYSE:LDI) is the least popular one with only 6 bullish hedge fund positions. Coursera, Inc. (NYSE:COUR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for COUR is 56.1. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 July 9th and beat the market again by 6.7 percentage points. Unfortunately COUR wasn't nearly as popular as these 5 stocks and hedge funds that were betting on COUR were disappointed as the stock returned -11% since the end of March (through 7/9) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.