- Oops!Something went wrong.Please try again later.
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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Eventbrite, Inc. (NYSE:EB).
Eventbrite, Inc. (NYSE:EB) was in 25 hedge funds' portfolios at the end of the first quarter of 2020. EB shareholders have witnessed an increase in hedge fund interest recently. There were 24 hedge funds in our database with EB holdings at the end of the previous quarter. Our calculations also showed that EB isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
[caption id="attachment_262336" align="aligncenter" width="399"]
J. Carlo Cannell of Cannell Capital[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's take a gander at the fresh hedge fund action surrounding Eventbrite, Inc. (NYSE:EB).
How are hedge funds trading Eventbrite, Inc. (NYSE:EB)?
At Q1's end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in EB a year ago. With hedge funds' sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Among these funds, Foxhaven Asset Management held the most valuable stake in Eventbrite, Inc. (NYSE:EB), which was worth $30.9 million at the end of the third quarter. On the second spot was Immersion Capital which amassed $28.9 million worth of shares. Cadian Capital, Echo Street Capital Management, and Luminus Management 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 Immersion Capital allocated the biggest weight to Eventbrite, Inc. (NYSE:EB), around 3.94% of its 13F portfolio. Foxhaven Asset Management is also relatively very bullish on the stock, designating 1.66 percent of its 13F equity portfolio to EB.
As one would reasonably expect, some big names have been driving this bullishness. Luminus Management, managed by Jonathan Barrett and Paul Segal, initiated the most valuable position in Eventbrite, Inc. (NYSE:EB). Luminus Management had $5.6 million invested in the company at the end of the quarter. J. Carlo Cannell's Cannell Capital also made a $1.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Greg Eisner's Engineers Gate Manager, Mario Cibelli's Marathon Partners, and Lee Ainslie's Maverick Capital.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Eventbrite, Inc. (NYSE:EB) but similarly valued. These stocks are Triumph Bancorp Inc (NASDAQ:TBK), Eagle Pharmaceuticals Inc (NASDAQ:EGRX), The Andersons, Inc. (NASDAQ:ANDE), and Retrophin Inc (NASDAQ:RTRX). This group of stocks' market values are closest to EB's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TBK,6,24013,-1 EGRX,15,108673,1 ANDE,6,10449,-7 RTRX,22,257866,0 Average,12.25,100250,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $100 million. That figure was $134 million in EB's case. Retrophin Inc (NASDAQ:RTRX) is the most popular stock in this table. On the other hand Triumph Bancorp Inc (NASDAQ:TBK) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Eventbrite, Inc. (NYSE:EB) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 13.9% in 2020 through June 10th but still managed to beat the market by 14.2 percentage points. Hedge funds were also right about betting on EB as the stock returned 46.8% so far in Q2 (through June 10th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.