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With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was VIZIO Holding Corp. (NYSE:VZIO).
Is VIZIO Holding Corp. (NYSE:VZIO) a buy, sell, or hold? Investors who are in the know were taking an optimistic view. The number of long hedge fund positions improved by 19 in recent months. VIZIO Holding Corp. (NYSE:VZIO) was in 19 hedge funds' portfolios at the end of March. Our calculations also showed that VZIO isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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. Keeping this in mind we're going to take a look at the new hedge fund action regarding VIZIO Holding Corp. (NYSE:VZIO).
Do Hedge Funds Think VZIO Is A Good Stock To Buy Now?
At the end of March, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 19 from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in VZIO over the last 23 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Shelter Haven Capital Management was the largest shareholder of VIZIO Holding Corp. (NYSE:VZIO), with a stake worth $24.1 million reported as of the end of March. Trailing Shelter Haven Capital Management was Point72 Asset Management, which amassed a stake valued at $16.7 million. Ophir Asset Management, Driehaus Capital, and Adage Capital 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 Shelter Haven Capital Management allocated the biggest weight to VIZIO Holding Corp. (NYSE:VZIO), around 7.61% of its 13F portfolio. Ophir Asset Management is also relatively very bullish on the stock, dishing out 3.2 percent of its 13F equity portfolio to VZIO.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Shelter Haven Capital Management, managed by Jerry Kochanski, created the most valuable position in VIZIO Holding Corp. (NYSE:VZIO). Shelter Haven Capital Management had $24.1 million invested in the company at the end of the quarter. Steve Cohen's Point72 Asset Management also made a $16.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Steven Ng and Andrew Mitchell's Ophir Asset Management, Richard Driehaus's Driehaus Capital, and Phill Gross and Robert Atchinson's Adage Capital Management.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as VIZIO Holding Corp. (NYSE:VZIO) but similarly valued. These stocks are UMB Financial Corporation (NASDAQ:UMBF), Sterling Bancorp (NYSE:STL), Rayonier Inc. (NYSE:RYN), DigitalOcean Holdings, Inc. (NYSE:DOCN), Diversey Holdings, Ltd. (NASDAQ:DSEY), Schneider National, Inc. (NYSE:SNDR), and Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN). This group of stocks' market caps are similar to VZIO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UMBF,13,106723,-7 STL,20,343567,1 RYN,18,428689,2 DOCN,22,197674,22 DSEY,21,284464,21 SNDR,19,127648,-1 BHVN,33,359789,-6 Average,20.9,264079,4.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.9 hedge funds with bullish positions and the average amount invested in these stocks was $264 million. That figure was $126 million in VZIO's case. Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN) is the most popular stock in this table. On the other hand UMB Financial Corporation (NASDAQ:UMBF) is the least popular one with only 13 bullish hedge fund positions. VIZIO Holding Corp. (NYSE:VZIO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for VZIO is 34. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately VZIO wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); VZIO investors were disappointed as the stock returned 6% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.