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Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Beyond Meat, Inc. (NASDAQ:BYND), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Beyond Meat, Inc. (NASDAQ:BYND) was in 17 hedge funds' portfolios at the end of September. BYND shareholders have witnessed an increase in activity from the world's largest hedge funds in recent months. There were 16 hedge funds in our database with BYND holdings at the end of the previous quarter. Our calculations also showed that BYND isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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Chase Coleman of Tiger Global[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's take a peek at the latest hedge fund action surrounding Beyond Meat, Inc. (NASDAQ:BYND).
What have hedge funds been doing with Beyond Meat, Inc. (NASDAQ:BYND)?
At Q3's end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BYND over the last 17 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Tiger Global Management held the most valuable stake in Beyond Meat, Inc. (NASDAQ:BYND), which was worth $26 million at the end of the third quarter. On the second spot was 683 Capital Partners which amassed $22.7 million worth of shares. Sculptor Capital, Bill & Melinda Gates Foundation Trust, and Southpoint Capital Advisors 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 683 Capital Partners allocated the biggest weight to Beyond Meat, Inc. (NASDAQ:BYND), around 2.52% of its 13F portfolio. Atika Capital is also relatively very bullish on the stock, setting aside 1.46 percent of its 13F equity portfolio to BYND.
Consequently, specific money managers have been driving this bullishness. Tiger Global Management, managed by Chase Coleman, created the most valuable position in Beyond Meat, Inc. (NASDAQ:BYND). Tiger Global Management had $26 million invested in the company at the end of the quarter. Ari Zweiman's 683 Capital Partners also made a $22.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Sculptor Capital, Michael Larson's Bill & Melinda Gates Foundation Trust, and John Smith Clark's Southpoint Capital Advisors.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Beyond Meat, Inc. (NASDAQ:BYND) but similarly valued. These stocks are Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), NICE Ltd. (NASDAQ:NICE), Melco Resorts & Entertainment Limited (NASDAQ:MLCO), and Teck Resources Limited (NYSE:TECK). This group of stocks' market values are closest to BYND's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ALNY,29,779948,-6 NICE,16,375883,-3 MLCO,24,533835,2 TECK,17,575085,-6 Average,21.5,566188,-3.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $566 million. That figure was $93 million in BYND's case. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is the most popular stock in this table. On the other hand NICE Ltd. (NASDAQ:NICE) is the least popular one with only 16 bullish hedge fund positions. Beyond Meat, Inc. (NASDAQ:BYND) is not the least popular stock in this group but hedge fund interest is still below average. 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately BYND wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); BYND investors were disappointed as the stock returned -44.2% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.