We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn't mean that they don't have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards Qiwi PLC (NASDAQ:QIWI) and determine whether hedge funds skillfully traded this stock.
Qiwi PLC (NASDAQ:QIWI) investors should be aware of an increase in activity from the world's largest hedge funds of late. Our calculations also showed that QIWI 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_339612" align="aligncenter" width="392"] Kerr Neilson of Platinum Asset Management[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a "weekend trading strategy", so we look into his strategy's picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller's investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we're going to take a glance at the fresh hedge fund action encompassing Qiwi PLC (NASDAQ:QIWI).
How are hedge funds trading Qiwi PLC (NASDAQ:QIWI)?
At Q1's end, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from one quarter earlier. By comparison, 12 hedge funds held shares or bullish call options in QIWI a year ago. With hedgies' sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
The largest stake in Qiwi PLC (NASDAQ:QIWI) was held by Renaissance Technologies, which reported holding $21.4 million worth of stock at the end of September. It was followed by Melqart Asset Management with a $10.9 million position. Other investors bullish on the company included Platinum Asset Management, Arrowstreet Capital, and Millennium Management. In terms of the portfolio weights assigned to each position Melqart Asset Management allocated the biggest weight to Qiwi PLC (NASDAQ:QIWI), around 1.08% of its 13F portfolio. CSat Investment Advisory is also relatively very bullish on the stock, earmarking 0.11 percent of its 13F equity portfolio to QIWI.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, initiated the biggest position in Qiwi PLC (NASDAQ:QIWI). Citadel Investment Group had $0.3 million invested in the company at the end of the quarter. Matthew Hulsizer's PEAK6 Capital Management also initiated a $0.2 million position during the quarter. The following funds were also among the new QIWI investors: Mike Vranos's Ellington and D. E. Shaw's D E Shaw.
Let's go over hedge fund activity in other stocks similar to Qiwi PLC (NASDAQ:QIWI). These stocks are Gossamer Bio, Inc. (NASDAQ:GOSS), NetGear, Inc. (NASDAQ:NTGR), Kadmon Holdings, Inc. (NYSE:KDMN), and Systemax Inc. (NYSE:SYX). This group of stocks' market values match QIWI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GOSS,10,80706,-2 NTGR,13,31992,-3 KDMN,28,307150,3 SYX,11,14658,-2 Average,15.5,108627,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $109 million. That figure was $42 million in QIWI's case. Kadmon Holdings, Inc. (NYSE:KDMN) is the most popular stock in this table. On the other hand Gossamer Bio, Inc. (NASDAQ:GOSS) is the least popular one with only 10 bullish hedge fund positions. Qiwi PLC (NASDAQ:QIWI) is not the least popular stock in this group but hedge fund interest is still below average. 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 gained 12.3% in 2020 through June 30th and still beat the market by 15.5 percentage points. A small number of hedge funds were also right about betting on QIWI as the stock returned 66.9% during the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.