At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Yandex NV (NASDAQ:YNDX).
Yandex NV (NASDAQ:YNDX) was in 35 hedge funds' portfolios at the end of the first quarter of 2020. YNDX shareholders have witnessed a decrease in hedge fund sentiment of late. There were 38 hedge funds in our database with YNDX holdings at the end of the previous quarter. Our calculations also showed that YNDX 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.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 51 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_670753" align="aligncenter" width="400"] John Armitage of Egerton Capital[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. 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. Keeping this in mind let's take a peek at the new hedge fund action surrounding Yandex NV (NASDAQ:YNDX).
What have hedge funds been doing with Yandex NV (NASDAQ:YNDX)?
At Q1's end, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards YNDX over the last 18 quarters. With the smart money's capital changing hands, there exists an "upper tier" of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Among these funds, Egerton Capital Limited held the most valuable stake in Yandex NV (NASDAQ:YNDX), which was worth $239.4 million at the end of the third quarter. On the second spot was GQG Partners which amassed $120.1 million worth of shares. Arrowstreet Capital, Fisher Asset Management, and Kora 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 Kora Management allocated the biggest weight to Yandex NV (NASDAQ:YNDX), around 10.99% of its 13F portfolio. Prince Street Capital Management is also relatively very bullish on the stock, earmarking 8.01 percent of its 13F equity portfolio to YNDX.
Seeing as Yandex NV (NASDAQ:YNDX) has experienced falling interest from the aggregate hedge fund industry, it's easy to see that there were a few hedgies that decided to sell off their entire stakes last quarter. Intriguingly, John Overdeck and David Siegel's Two Sigma Advisors cut the biggest position of the "upper crust" of funds watched by Insider Monkey, comprising about $82.1 million in stock. Scott Ferguson's fund, Sachem Head Capital, also dumped its stock, about $73.9 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds last quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Yandex NV (NASDAQ:YNDX) but similarly valued. We will take a look at NortonLifeLock Inc. (NASDAQ:NLOK), Expeditors International of Washington (NASDAQ:EXPD), SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), and Shinhan Financial Group Co., Ltd. (NYSE:SHG). This group of stocks' market valuations are closest to YNDX's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NLOK,42,1352392,-4 EXPD,31,346287,4 SSNC,57,1732077,-2 SHG,5,8469,2 Average,33.75,859806,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.75 hedge funds with bullish positions and the average amount invested in these stocks was $860 million. That figure was $770 million in YNDX's case. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is the most popular stock in this table. On the other hand Shinhan Financial Group Co., Ltd. (NYSE:SHG) is the least popular one with only 5 bullish hedge fund positions. Yandex NV (NASDAQ:YNDX) is not the most popular stock in this group but hedge fund interest is still above 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 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on YNDX, though not to the same extent, as the stock returned 18.1% during the first two months of the second quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.