We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of December 31st. In this article we look at what those investors think of 21Vianet Group Inc (NASDAQ:VNET).
21Vianet Group Inc (NASDAQ:VNET) investors should be aware of an increase in activity from the world's largest hedge funds recently. Our calculations also showed that VNET isn't among the 30 most popular stocks among hedge funds.
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 flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let's take a look at the fresh hedge fund action surrounding 21Vianet Group Inc (NASDAQ:VNET).
What does the smart money think about 21Vianet Group Inc (NASDAQ:VNET)?
Heading into the first quarter of 2019, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 31% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards VNET over the last 14 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Dalton Investments was the largest shareholder of 21Vianet Group Inc (NASDAQ:VNET), with a stake worth $7.5 million reported as of the end of December. Trailing Dalton Investments was Sylebra Capital Management, which amassed a stake valued at $6.5 million. Millennium Management, Renaissance Technologies, and Sensato Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Now, key money managers have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, initiated the largest position in 21Vianet Group Inc (NASDAQ:VNET). Point72 Asset Management had $1.1 million invested in the company at the end of the quarter. Minhua Zhang's Weld Capital Management also made a $0.3 million investment in the stock during the quarter. The following funds were also among the new VNET investors: Noam Gottesman's GLG Partners and Ken Griffin's Citadel Investment Group.
Let's now review hedge fund activity in other stocks similar to 21Vianet Group Inc (NASDAQ:VNET). We will take a look at Bluegreen Vacations Corporation (NYSE:BXG), Gannett Co., Inc. (NYSE:GCI), MGP Ingredients Inc (NASDAQ:MGPI), and American Woodmark Corporation (NASDAQ:AMWD). This group of stocks' market values are similar to VNET's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BXG,2,3589,0 GCI,17,74126,-2 MGPI,8,23696,-3 AMWD,11,44367,-6 Average,9.5,36445,-2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.5 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $34 million in VNET's case. Gannett Co., Inc. (NYSE:GCI) is the most popular stock in this table. On the other hand Bluegreen Vacations Corporation (NYSE:BXG) is the least popular one with only 2 bullish hedge fund positions. 21Vianet Group Inc (NASDAQ:VNET) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately VNET wasn't nearly as popular as these 15 stock and hedge funds that were betting on VNET were disappointed as the stock returned -11.9% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.