The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards 58.com Inc (NYSE:WUBA).
58.com Inc (NYSE:WUBA) was in 24 hedge funds' portfolios at the end of the first quarter of 2019. WUBA investors should pay attention to an increase in activity from the world's largest hedge funds recently. There were 23 hedge funds in our database with WUBA holdings at the end of the previous quarter. Our calculations also showed that wuba isn't among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to go over the new hedge fund action encompassing 58.com Inc (NYSE:WUBA).
What have hedge funds been doing with 58.com Inc (NYSE:WUBA)?
Heading into the second quarter of 2019, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from one quarter earlier. By comparison, 24 hedge funds held shares or bullish call options in WUBA a year ago. 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, Platinum Asset Management was the largest shareholder of 58.com Inc (NYSE:WUBA), with a stake worth $130.2 million reported as of the end of March. Trailing Platinum Asset Management was Lakewood Capital Management, which amassed a stake valued at $90 million. GMT Capital, Marshall Wace LLP, and First Pacific Advisors LLC were also very fond of the stock, giving the stock large weights in their portfolios.
As one would reasonably expect, key money managers have jumped into 58.com Inc (NYSE:WUBA) headfirst. Tiger Pacific Capital, managed by Run Ye, Junji Takegami and Hoyon Hwang, created the most outsized position in 58.com Inc (NYSE:WUBA). Tiger Pacific Capital had $9.7 million invested in the company at the end of the quarter. Simon Sadler's Segantii Capital also initiated a $1.1 million position during the quarter. The other funds with brand new WUBA positions are Warren Lammert's Granite Point Capital and Jeffrey Talpins's Element Capital Management.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as 58.com Inc (NYSE:WUBA) but similarly valued. These stocks are Sea Limited (NYSE:SE), Spirit AeroSystems Holdings, Inc. (NYSE:SPR), AGNC Investment Corp. (NASDAQ:AGNC), and Targa Resources Corp (NYSE:TRGP). This group of stocks' market values resemble WUBA's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SE,50,2178777,36 SPR,29,2186164,-3 AGNC,15,233055,-6 TRGP,23,334534,-12 Average,29.25,1233133,3.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.25 hedge funds with bullish positions and the average amount invested in these stocks was $1233 million. That figure was $529 million in WUBA's case. Spectra Energy Corp. (NYSE:SE) is the most popular stock in this table. On the other hand AGNC Investment Corp. (NASDAQ:AGNC) is the least popular one with only 15 bullish hedge fund positions. 58.com Inc (NYSE:WUBA) 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 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately WUBA wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); WUBA investors were disappointed as the stock returned -10.3% during the same time period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.