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. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of YETI Holdings, Inc. (NYSE:YETI).
YETI Holdings, Inc. (NYSE:YETI) has seen an increase in hedge fund interest recently. YETI was in 20 hedge funds' portfolios at the end of March. There were 17 hedge funds in our database with YETI positions at the end of the previous quarter. Our calculations also showed that YETI 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_735677" align="aligncenter" width="392"] Sander Gerber of Hudson Bay Capital[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. 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. Now let's take a look at the key hedge fund action regarding YETI Holdings, Inc. (NYSE:YETI).
Hedge fund activity in YETI Holdings, Inc. (NYSE:YETI)
At the end of the first quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the fourth quarter of 2019. On the other hand, there were a total of 14 hedge funds with a bullish position in YETI a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in YETI Holdings, Inc. (NYSE:YETI). Citadel Investment Group has a $15 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Principal Global Investors of Columbus Circle Investors, with a $9.6 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions comprise Doug Gordon, Jon Hilsabeck and Don Jabro's Shellback Capital, Joseph Samuels's Islet Management and Dmitry Balyasny's Balyasny Asset Management. In terms of the portfolio weights assigned to each position Berylson Capital Partners allocated the biggest weight to YETI Holdings, Inc. (NYSE:YETI), around 5.15% of its 13F portfolio. Pinz Capital is also relatively very bullish on the stock, earmarking 3.69 percent of its 13F equity portfolio to YETI.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls' herd. Berylson Capital Partners, managed by James Thomas Berylson, assembled the most outsized position in YETI Holdings, Inc. (NYSE:YETI). Berylson Capital Partners had $1.9 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace's Marshall Wace LLP also made a $1.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew L Pinz's Pinz Capital, Greg Eisner's Engineers Gate Manager, and Sander Gerber's Hudson Bay Capital Management.
Let's now review hedge fund activity in other stocks similar to YETI Holdings, Inc. (NYSE:YETI). These stocks are Artisan Partners Asset Management Inc (NYSE:APAM), Fate Therapeutics Inc (NASDAQ:FATE), Golub Capital BDC Inc (NASDAQ:GBDC), and Genworth Financial Inc (NYSE:GNW). This group of stocks' market valuations are closest to YETI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position APAM,20,172187,4 FATE,24,582153,1 GBDC,13,52793,-3 GNW,32,258511,0 Average,22.25,266411,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $266 million. That figure was $57 million in YETI's case. Genworth Financial Inc (NYSE:GNW) is the most popular stock in this table. On the other hand Golub Capital BDC Inc (NASDAQ:GBDC) is the least popular one with only 13 bullish hedge fund positions. YETI Holdings, Inc. (NYSE:YETI) 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 12.2% in 2020 through June 17th and still beat the market by 14.8 percentage points. A small number of hedge funds were also right about betting on YETI as the stock returned 92.9% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.