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 gone over 730 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 June 28th. In this article we look at what those investors think of Qudian Inc. (NYSE:QD).
Qudian Inc. (NYSE:QD) investors should be aware of an increase in hedge fund sentiment lately. QD was in 22 hedge funds' portfolios at the end of June. There were 18 hedge funds in our database with QD positions at the end of the previous quarter. Our calculations also showed that QD isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most shareholders, hedge funds are viewed as underperforming, outdated investment vehicles of years past. While there are more than 8000 funds in operation today, We choose to focus on the crème de la crème of this club, around 750 funds. Most estimates calculate that this group of people control the majority of the smart money's total asset base, and by tailing their best equity investments, Insider Monkey has unsheathed a number of investment strategies that have historically outpaced Mr. Market. Insider Monkey's flagship hedge fund strategy outperformed the S&P 500 index by around 5 percentage points per annum since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to review the fresh hedge fund action encompassing Qudian Inc. (NYSE:QD).
How have hedgies been trading Qudian Inc. (NYSE:QD)?
At the end of the second quarter, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 22% from the first quarter of 2019. On the other hand, there were a total of 8 hedge funds with a bullish position in QD 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.
The largest stake in Qudian Inc. (NYSE:QD) was held by GLG Partners, which reported holding $44.8 million worth of stock at the end of March. It was followed by Indus Capital with a $33.9 million position. Other investors bullish on the company included Arrowstreet Capital, Keywise Capital Management, and Renaissance Technologies.
As one would reasonably expect, key hedge funds have been driving this bullishness. Keywise Capital Management, managed by Fang Zheng, initiated the largest position in Qudian Inc. (NYSE:QD). Keywise Capital Management had $22.5 million invested in the company at the end of the quarter. Jeffrey Talpins's Element Capital Management also initiated a $5.3 million position during the quarter. The other funds with new positions in the stock are Gavin Saitowitz and Cisco J. del Valle's Springbok Capital, Panayotis Takis Sparaggis's Alkeon Capital Management, and Frank Slattery's Symmetry Peak Management.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Qudian Inc. (NYSE:QD) but similarly valued. These stocks are MyoKardia, Inc. (NASDAQ:MYOK), Universal Forest Products, Inc. (NASDAQ:UFPI), Power Integrations Inc (NASDAQ:POWI), and PDC Energy Inc (NASDAQ:PDCE). All of these stocks' market caps resemble QD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MYOK,24,732265,-10 UFPI,17,64097,-3 POWI,9,83455,3 PDCE,14,258405,0 Average,16,284556,-2.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $285 million. That figure was $171 million in QD's case. MyoKardia, Inc. (NASDAQ:MYOK) is the most popular stock in this table. On the other hand Power Integrations Inc (NASDAQ:POWI) is the least popular one with only 9 bullish hedge fund positions. Qudian Inc. (NYSE:QD) 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately QD wasn't nearly as popular as these 20 stocks and hedge funds that were betting on QD were disappointed as the stock returned -8.1% during the third 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.