Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 due to various reasons. Nevertheless, the data show elite investors' consensus picks have done well on average over the long-term. The top 20 stocks among hedge funds beat the S&P 500 Index ETF by 4 percentage points so far this year. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Revolve Group, Inc. (NYSE:RVLV) from the perspective of those elite funds.
Revolve Group, Inc. (NYSE:RVLV) was in 15 hedge funds' portfolios at the end of the second quarter of 2019. RVLV investors should pay attention to an increase in hedge fund interest of late. There were 0 hedge funds in our database with RVLV holdings at the end of the previous quarter. Our calculations also showed that RVLV isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most investors, hedge funds are assumed to be underperforming, outdated investment tools of years past. While there are over 8000 funds with their doors open today, We choose to focus on the moguls of this club, around 750 funds. These hedge fund managers manage the majority of all hedge funds' total asset base, and by observing their matchless equity investments, Insider Monkey has identified various investment strategies that have historically outperformed Mr. Market. Insider Monkey's flagship hedge fund strategy outpaced 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 take a look at the new hedge fund action surrounding Revolve Group, Inc. (NYSE:RVLV).
How have hedgies been trading Revolve Group, Inc. (NYSE:RVLV)?
At Q2's end, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15 from the first quarter of 2019. Below, you can check out the change in hedge fund sentiment towards RVLV over the last 16 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Citadel Investment Group was the largest shareholder of Revolve Group, Inc. (NYSE:RVLV), with a stake worth $17.3 million reported as of the end of March. Trailing Citadel Investment Group was Whale Rock Capital Management, which amassed a stake valued at $7.8 million. Element Capital Management, Mark Asset Management, and Athanor Capital were also very fond of the stock, giving the stock large weights in their portfolios.
Now, key hedge funds were leading the bulls' herd. Citadel Investment Group, managed by Ken Griffin, initiated the most valuable position in Revolve Group, Inc. (NYSE:RVLV). Citadel Investment Group had $17.3 million invested in the company at the end of the quarter. Alex Sacerdote's Whale Rock Capital Management also made a $7.8 million investment in the stock during the quarter. The following funds were also among the new RVLV investors: Jeffrey Talpins's Element Capital Management, Morris Mark's Mark Asset Management, and Parvinder Thiara's Athanor Capital.
Let's also examine hedge fund activity in other stocks similar to Revolve Group, Inc. (NYSE:RVLV). We will take a look at Applied Industrial Technologies, Inc. (NYSE:AIT), Canada Goose Holdings Inc. (NYSE:GOOS), Alamos Gold Inc (NYSE:AGI), and Sunrun Inc (NASDAQ:RUN). All of these stocks' market caps are similar to RVLV's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AIT,18,108981,1 GOOS,18,109012,-9 AGI,12,168949,0 RUN,17,498057,2 Average,16.25,221250,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $221 million. That figure was $52 million in RVLV's case. Applied Industrial Technologies, Inc. (NYSE:AIT) is the most popular stock in this table. On the other hand Alamos Gold Inc (NYSE:AGI) is the least popular one with only 12 bullish hedge fund positions. Revolve Group, Inc. (NYSE:RVLV) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately RVLV wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); RVLV investors were disappointed as the stock returned -32.3% 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 in 2019.
Disclosure: None. This article was originally published at Insider Monkey.