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Is Fiverr International Ltd. (FVRR) Going to Burn These Hedge Funds?

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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 Fiverr International Ltd. (NYSE:FVRR), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is Fiverr International Ltd. (NYSE:FVRR) a buy right now? Hedge funds were getting less bullish. The number of bullish hedge fund positions went down by 1 lately. Fiverr International Ltd. (NYSE:FVRR) was in 29 hedge funds' portfolios at the end of September. The all time high for this statistic is 30. Our calculations also showed that FVRR 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 let's analyze the new hedge fund action regarding Fiverr International Ltd. (NYSE:FVRR).

Matthew Hulsizer PEAK6 Capital
Matthew Hulsizer PEAK6 Capital

Matthew Hulsizer of PEAK6 Capital

Do Hedge Funds Think FVRR Is A Good Stock To Buy Now?

At Q3's end, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the previous quarter. On the other hand, there were a total of 30 hedge funds with a bullish position in FVRR 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.

The largest stake in Fiverr International Ltd. (NYSE:FVRR) was held by SRS Investment Management, which reported holding $223.1 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $68 million position. Other investors bullish on the company included Millennium Management, Honeycomb Asset Management, and Zevenbergen Capital Investments. In terms of the portfolio weights assigned to each position Brightlight Capital allocated the biggest weight to Fiverr International Ltd. (NYSE:FVRR), around 13.92% of its 13F portfolio. Kent Lake Capital is also relatively very bullish on the stock, earmarking 3.93 percent of its 13F equity portfolio to FVRR.

Due to the fact that Fiverr International Ltd. (NYSE:FVRR) has experienced bearish sentiment from the smart money, it's easy to see that there were a few fund managers that slashed their positions entirely by the end of the third quarter. Interestingly, Doron Breen and Mori Arkin's Sphera Global Healthcare Fund dropped the biggest investment of the 750 funds tracked by Insider Monkey, comprising close to $19.2 million in stock. James Crichton's fund, Hitchwood Capital Management, also cut its stock, about $8.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 1 funds by the end of the third quarter.

Let's go over hedge fund activity in other stocks similar to Fiverr International Ltd. (NYSE:FVRR). These stocks are AngloGold Ashanti Limited (NYSE:AU), Exelixis, Inc. (NASDAQ:EXEL), Beyond Meat, Inc. (NASDAQ:BYND), Prosperity Bancshares, Inc. (NYSE:PB), Digital Turbine Inc (NASDAQ:APPS), OGE Energy Corp. (NYSE:OGE), and J2 Global Inc (NASDAQ:JCOM). This group of stocks' market values match FVRR's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AU,10,327927,-2 EXEL,30,896585,-3 BYND,16,114044,-1 PB,16,102630,0 APPS,19,209159,-11 OGE,21,224687,4 JCOM,20,410631,-2 Average,18.9,326523,-2.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.9 hedge funds with bullish positions and the average amount invested in these stocks was $327 million. That figure was $520 million in FVRR's case. Exelixis, Inc. (NASDAQ:EXEL) is the most popular stock in this table. On the other hand AngloGold Ashanti Limited (NYSE:AU) is the least popular one with only 10 bullish hedge fund positions. Fiverr International Ltd. (NYSE:FVRR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FVRR is 80.5. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately FVRR wasn't nearly as popular as these 5 stocks and hedge funds that were betting on FVRR were disappointed as the stock returned -22.5% since the end of September (through 11/30) 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.