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 ANGI Homeservices Inc (NASDAQ:ANGI).
ANGI Homeservices Inc (NASDAQ:ANGI) shareholders have witnessed an increase in enthusiasm from smart money of late. ANGI was in 27 hedge funds' portfolios at the end of the first quarter of 2020. There were 23 hedge funds in our database with ANGI holdings at the end of the previous quarter. Our calculations also showed that ANGI 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_690797" align="aligncenter" width="399"] Sahm Adrangi of Kerrisdale Capital[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. 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 we're going to view the fresh hedge fund action encompassing ANGI Homeservices Inc (NASDAQ:ANGI).
How have hedgies been trading ANGI Homeservices Inc (NASDAQ:ANGI)?
Heading into the second quarter of 2020, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the fourth quarter of 2019. On the other hand, there were a total of 22 hedge funds with a bullish position in ANGI a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Christian Leone's Luxor Capital Group has the number one position in ANGI Homeservices Inc (NASDAQ:ANGI), worth close to $56.9 million, corresponding to 1.7% of its total 13F portfolio. The second most bullish fund manager is ShawSpring Partners, led by Dennis Hong, holding a $32.1 million position; 11.4% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism comprise Renaissance Technologies, Greg Poole's Echo Street Capital Management and Joshua Nash's Ulysses Management. In terms of the portfolio weights assigned to each position ShawSpring Partners allocated the biggest weight to ANGI Homeservices Inc (NASDAQ:ANGI), around 11.37% of its 13F portfolio. Ulysses Management is also relatively very bullish on the stock, designating 2.91 percent of its 13F equity portfolio to ANGI.
As aggregate interest increased, specific money managers have jumped into ANGI Homeservices Inc (NASDAQ:ANGI) headfirst. Park West Asset Management, managed by Peter S. Park, initiated the most valuable position in ANGI Homeservices Inc (NASDAQ:ANGI). Park West Asset Management had $6.6 million invested in the company at the end of the quarter. Sahm Adrangi's Kerrisdale Capital also made a $4.2 million investment in the stock during the quarter. The following funds were also among the new ANGI investors: Ben Gordon's Blue Grotto Capital, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, and Greg Eisner's Engineers Gate Manager.
Let's also examine hedge fund activity in other stocks similar to ANGI Homeservices Inc (NASDAQ:ANGI). We will take a look at Marathon Oil Corporation (NYSE:MRO), World Wrestling Entertainment, Inc. (NYSE:WWE), Yamana Gold Inc. (NYSE:AUY), and Power Integrations Inc (NASDAQ:POWI). This group of stocks' market caps match ANGI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MRO,24,93423,-6 WWE,31,374902,1 AUY,14,212094,-2 POWI,21,76700,4 Average,22.5,189280,-0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $189 million. That figure was $232 million in ANGI's case. World Wrestling Entertainment, Inc. (NYSE:WWE) is the most popular stock in this table. On the other hand Yamana Gold Inc. (NYSE:AUY) is the least popular one with only 14 bullish hedge fund positions. ANGI Homeservices Inc (NASDAQ:ANGI) 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 ANGI as the stock returned 106.7% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.