How do we determine whether Shutterfly, Inc. (NASDAQ:SFLY) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Shutterfly, Inc. (NASDAQ:SFLY) was in 28 hedge funds' portfolios at the end of March. SFLY shareholders have witnessed an increase in activity from the world's largest hedge funds in recent months. There were 22 hedge funds in our database with SFLY positions at the end of the previous quarter. Our calculations also showed that sfly isn't among the 30 most popular stocks among hedge funds.
In the financial world there are a lot of gauges investors employ to grade their stock investments. Some of the less known gauges are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the elite investment managers can outpace the market by a superb margin (see the details here).
Let's take a look at the latest hedge fund action encompassing Shutterfly, Inc. (NASDAQ:SFLY).
What have hedge funds been doing with Shutterfly, Inc. (NASDAQ:SFLY)?
At the end of the first quarter, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 27% from the previous quarter. On the other hand, there were a total of 27 hedge funds with a bullish position in SFLY a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
More specifically, Okumus Fund Management was the largest shareholder of Shutterfly, Inc. (NASDAQ:SFLY), with a stake worth $66.2 million reported as of the end of March. Trailing Okumus Fund Management was HG Vora Capital Management, which amassed a stake valued at $48.8 million. Freshford Capital Management, Renaissance Technologies, and Maverick Capital were also very fond of the stock, giving the stock large weights in their portfolios.
Consequently, specific money managers have jumped into Shutterfly, Inc. (NASDAQ:SFLY) headfirst. HG Vora Capital Management, managed by Parag Vora, initiated the largest position in Shutterfly, Inc. (NASDAQ:SFLY). HG Vora Capital Management had $48.8 million invested in the company at the end of the quarter. Steve Cohen's Point72 Asset Management also made a $15.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Brett Hendrickson's Nokomis Capital, Himanshu Gulati's Antara Capital, and Joel Greenblatt's Gotham Asset Management.
Let's now take a look at hedge fund activity in other stocks similar to Shutterfly, Inc. (NASDAQ:SFLY). These stocks are Suburban Propane Partners LP (NYSE:SPH), TriMas Corp (NASDAQ:TRS), Rowan Companies plc (NYSE:RDC), and K12 Inc. (NYSE:LRN). This group of stocks' market values match SFLY's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SPH,5,86935,0 TRS,18,123730,2 RDC,18,375896,0 LRN,24,197902,3 Average,16.25,196116,1.25 [/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 $196 million. That figure was $424 million in SFLY's case. K12 Inc. (NYSE:LRN) is the most popular stock in this table. On the other hand Suburban Propane Partners LP (NYSE:SPH) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Shutterfly, Inc. (NASDAQ:SFLY) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on SFLY as the stock returned 19% during the same period and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.