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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Wix.Com Ltd (NASDAQ:WIX).
Wix.Com Ltd (NASDAQ:WIX) was in 40 hedge funds' portfolios at the end of March. The all time high for this statistic was previously 37. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. WIX has seen an increase in support from the world's most elite money managers lately. There were 37 hedge funds in our database with WIX holdings at the end of December. Our calculations also showed that WIX 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 Overdeck of Two Sigma Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery 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. Keeping this in mind we're going to take a peek at the recent hedge fund action surrounding Wix.Com Ltd (NASDAQ:WIX).
Do Hedge Funds Think WIX Is A Good Stock To Buy Now?
At the end of March, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards WIX over the last 23 quarters. With the smart money's capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Among these funds, Steadfast Capital Management held the most valuable stake in Wix.Com Ltd (NASDAQ:WIX), which was worth $499.5 million at the end of the fourth quarter. On the second spot was SQN Investors which amassed $105.6 million worth of shares. Two Sigma Advisors, Atreides Management, and Hound Partners 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 Blackcrane Capital allocated the biggest weight to Wix.Com Ltd (NASDAQ:WIX), around 19.35% of its 13F portfolio. Noked Capital is also relatively very bullish on the stock, earmarking 13.84 percent of its 13F equity portfolio to WIX.
As one would reasonably expect, key money managers were breaking ground themselves. Atreides Management, managed by Gavin Baker, initiated the most outsized position in Wix.Com Ltd (NASDAQ:WIX). Atreides Management had $93.9 million invested in the company at the end of the quarter. Seth Wunder's Black-and-White Capital also initiated a $75.8 million position during the quarter. The other funds with new positions in the stock are Roy Vermus and Shlomi Bracha's Noked Capital, Richard Gerson and Navroz D. Udwadia's Falcon Edge Capital, and Dmitry Balyasny's Balyasny Asset Management.
Let's now take a look at hedge fund activity in other stocks similar to Wix.Com Ltd (NASDAQ:WIX). These stocks are Markel Corporation (NYSE:MKL), Check Point Software Technologies Ltd. (NASDAQ:CHKP), Duke Realty Corporation (NYSE:DRE), Zendesk Inc (NYSE:ZEN), WPP Plc (NASDAQ:WPP), Grifols SA (NASDAQ:GRFS), and Arch Capital Group Ltd. (NASDAQ:ACGL). This group of stocks' market valuations are similar to WIX's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MKL,30,654208,-6 CHKP,31,494577,5 DRE,20,279688,3 ZEN,45,1483992,-13 WPP,5,34389,-1 GRFS,12,321129,-5 ACGL,34,1671185,0 Average,25.3,705595,-2.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.3 hedge funds with bullish positions and the average amount invested in these stocks was $706 million. That figure was $1461 million in WIX's case. Zendesk Inc (NYSE:ZEN) is the most popular stock in this table. On the other hand WPP Plc (NASDAQ:WPP) is the least popular one with only 5 bullish hedge fund positions. Wix.Com Ltd (NASDAQ:WIX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WIX is 81.8. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Hedge funds were also right about betting on WIX, though not to the same extent, as the stock returned 8.5% since Q1 (through June 25th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.