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After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Baidu, Inc. (NASDAQ:BIDU).
Baidu, Inc. (NASDAQ:BIDU) was in 89 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 72. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. BIDU investors should be aware of an increase in activity from the world's largest hedge funds lately. There were 51 hedge funds in our database with BIDU holdings at the end of December. Our calculations also showed that BIDU isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
John Rogers of Ariel Investments
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, advertising technology one of the fastest growing industries right now, so we are checking out stock pitches like this under-the-radar adtech stock that can deliver 10x gains. We go through lists like the 10 best hydrogen fuel cell 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. Now we're going to take a look at the key hedge fund action encompassing Baidu, Inc. (NASDAQ:BIDU).
Do Hedge Funds Think BIDU Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 89 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 75% from the previous quarter. On the other hand, there were a total of 49 hedge funds with a bullish position in BIDU a year ago. 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, ARK Investment Management was the largest shareholder of Baidu, Inc. (NASDAQ:BIDU), with a stake worth $1115.5 million reported as of the end of March. Trailing ARK Investment Management was Renaissance Technologies, which amassed a stake valued at $697.2 million. D E Shaw, Citadel Investment Group, and Ariel Investments 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 Kayak Investment Partners allocated the biggest weight to Baidu, Inc. (NASDAQ:BIDU), around 8.96% of its 13F portfolio. Keywise Capital Management is also relatively very bullish on the stock, dishing out 8.66 percent of its 13F equity portfolio to BIDU.
As one would reasonably expect, specific money managers have jumped into Baidu, Inc. (NASDAQ:BIDU) headfirst. D E Shaw, managed by D. E. Shaw, established the most valuable position in Baidu, Inc. (NASDAQ:BIDU). D E Shaw had $626.9 million invested in the company at the end of the quarter. Benjamin A. Smith's Laurion Capital Management also made a $231.6 million investment in the stock during the quarter. The following funds were also among the new BIDU investors: Chris Rokos's Rokos Capital Management, Karthik Sarma's SRS Investment Management, and Josh Resnick's Jericho Capital Asset Management.
Let's now take a look at hedge fund activity in other stocks similar to Baidu, Inc. (NASDAQ:BIDU). These stocks are Activision Blizzard, Inc. (NASDAQ:ATVI), ConocoPhillips (NYSE:COP), NetEase, Inc (NASDAQ:NTES), Chubb Limited (NYSE:CB), Becton, Dickinson and Company (NYSE:BDX), Illinois Tool Works Inc. (NYSE:ITW), and Norfolk Southern Corp. (NYSE:NSC). This group of stocks' market caps resemble BIDU's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ATVI,76,3580901,-5 COP,51,1205455,2 NTES,32,3501491,-6 CB,41,1605208,7 BDX,65,3732947,0 ITW,33,411615,-7 NSC,46,898621,2 Average,49.1,2133748,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 49.1 hedge funds with bullish positions and the average amount invested in these stocks was $2134 million. That figure was $6572 million in BIDU's case. Activision Blizzard, Inc. (NASDAQ:ATVI) is the most popular stock in this table. On the other hand NetEase, Inc (NASDAQ:NTES) is the least popular one with only 32 bullish hedge fund positions. Compared to these stocks Baidu, Inc. (NASDAQ:BIDU) is more popular among hedge funds. Our overall hedge fund sentiment score for BIDU is 90. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Unfortunately BIDU wasn't nearly as popular as these 5 stocks and hedge funds that were betting on BIDU were disappointed as the stock returned -13.7% since the end of the first quarter (through 6/11) 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 since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.