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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Formula One Group (NASDAQ:FWONK).
Is Formula One Group (NASDAQ:FWONK) a healthy stock for your portfolio? Hedge funds were cutting their exposure. The number of long hedge fund bets decreased by 5 in recent months. Formula One Group (NASDAQ:FWONK) was in 37 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 54. Our calculations also showed that FWONK isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Michael Gelband of ExodusPoint Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let's take a peek at the recent hedge fund action encompassing Formula One Group (NASDAQ:FWONK).
Do Hedge Funds Think FWONK Is A Good Stock To Buy Now?
At first quarter's end, a total of 37 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from the fourth quarter of 2020. On the other hand, there were a total of 37 hedge funds with a bullish position in FWONK a year ago. With hedgies' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Daniel S. Och's OZ Management has the largest position in Formula One Group (NASDAQ:FWONK), worth close to $308.1 million, amounting to 2.5% of its total 13F portfolio. Sitting at the No. 2 spot is Ashe Capital, managed by William Crowley, William Harker, and Stephen Blass, which holds a $253.3 million position; 17.3% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions consist of Ricky Sandler's Eminence Capital, Brett Barakett's Tremblant Capital and GregardáHeje's Kontiki Capital. In terms of the portfolio weights assigned to each position Portsea Asset Management allocated the biggest weight to Formula One Group (NASDAQ:FWONK), around 25.19% of its 13F portfolio. Ashe Capital is also relatively very bullish on the stock, earmarking 17.28 percent of its 13F equity portfolio to FWONK.
Judging by the fact that Formula One Group (NASDAQ:FWONK) has witnessed a decline in interest from the smart money, it's easy to see that there lies a certain "tier" of money managers who were dropping their positions entirely in the first quarter. At the top of the heap, Philippe Laffont's Coatue Management said goodbye to the largest investment of the 750 funds tracked by Insider Monkey, totaling an estimated $35.5 million in stock, and Brad Stephens's Six Columns Capital was right behind this move, as the fund dumped about $4.3 million worth. These moves are interesting, as aggregate hedge fund interest fell by 5 funds in the first quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Formula One Group (NASDAQ:FWONK) but similarly valued. These stocks are PRA Health Sciences Inc (NASDAQ:PRAH), Gaming and Leisure Properties Inc (NASDAQ:GLPI), Henry Schein, Inc. (NASDAQ:HSIC), Penumbra Inc (NYSE:PEN), American Financial Group, Inc. (NYSE:AFG), MGM Growth Properties LLC (NYSE:MGP), and Aspen Technology, Inc. (NASDAQ:AZPN). This group of stocks' market values resemble FWONK's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PRAH,35,1066188,12 GLPI,28,594880,-5 HSIC,32,1262137,-1 PEN,27,399617,7 AFG,21,191538,-3 MGP,34,592102,5 AZPN,32,1158081,3 Average,29.9,752078,2.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.9 hedge funds with bullish positions and the average amount invested in these stocks was $752 million. That figure was $1672 million in FWONK's case. PRA Health Sciences Inc (NASDAQ:PRAH) is the most popular stock in this table. On the other hand American Financial Group, Inc. (NYSE:AFG) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Formula One Group (NASDAQ:FWONK) is more popular among hedge funds. Our overall hedge fund sentiment score for FWONK is 70.6. 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. 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 19.3% in 2021 through June 25th and still managed to beat the market by 4.8 percentage points. Hedge funds were also right about betting on FWONK, though not to the same extent, as the stock returned 13% since the end of March (through June 25th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.