After several tireless days we have finished crunching the numbers from nearly 750 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 September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Qiwi PLC (NASDAQ:QIWI).
Qiwi PLC (NASDAQ:QIWI) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 13 hedge funds' portfolios at the end of September. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Eidos Therapeutics, Inc. (NASDAQ:EIDX), IMAX Corporation (NYSE:IMAX), and SciPlay Corporation (NASDAQ:SCPL) to gather more data points. Our calculations also showed that QIWI 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
[caption id="attachment_26073" align="alignnone" width="600"] Jim Simons of Renaissance Technologies[/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. We're going to check out the latest hedge fund action encompassing Qiwi PLC (NASDAQ:QIWI).
How are hedge funds trading Qiwi PLC (NASDAQ:QIWI)?
At Q3's end, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in QIWI over the last 17 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Qiwi PLC (NASDAQ:QIWI), with a stake worth $35.3 million reported as of the end of September. Trailing Renaissance Technologies was Melqart Asset Management, which amassed a stake valued at $22.5 million. Millennium Management, Platinum Asset Management, and Arrowstreet Capital 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 Melqart Asset Management allocated the biggest weight to Qiwi PLC (NASDAQ:QIWI), around 2.04% of its 13F portfolio. Nishkama Capital is also relatively very bullish on the stock, setting aside 1.61 percent of its 13F equity portfolio to QIWI.
Due to the fact that Qiwi PLC (NASDAQ:QIWI) has witnessed a decline in interest from the aggregate hedge fund industry, it's safe to say that there exists a select few hedgies that slashed their full holdings in the third quarter. Interestingly, Noam Gottesman's GLG Partners dumped the biggest investment of the 750 funds watched by Insider Monkey, comprising close to $3 million in stock. Matthew Hulsizer's fund, PEAK6 Capital Management, also dropped its stock, about $0 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's also examine hedge fund activity in other stocks similar to Qiwi PLC (NASDAQ:QIWI). These stocks are Eidos Therapeutics, Inc. (NASDAQ:EIDX), IMAX Corporation (NYSE:IMAX), SciPlay Corporation (NASDAQ:SCPL), and Denny's Corporation (NASDAQ:DENN). All of these stocks' market caps resemble QIWI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EIDX,14,185784,3 IMAX,15,46829,3 SCPL,16,81812,0 DENN,20,221074,3 Average,16.25,133875,2.25 [/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 $134 million. That figure was $105 million in QIWI's case. Denny's Corporation (NASDAQ:DENN) is the most popular stock in this table. On the other hand Eidos Therapeutics, Inc. (NASDAQ:EIDX) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Qiwi PLC (NASDAQ:QIWI) is even less popular than EIDX. Hedge funds dodged a bullet by taking a bearish stance towards QIWI. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately QIWI wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); QIWI investors were disappointed as the stock returned -8.4% during the fourth quarter (through the end of November) 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 so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.