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Here is What Hedge Funds Think About Agora, Inc. (API)

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With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was Agora, Inc. (NASDAQ:API).

Agora, Inc. (NASDAQ:API) investors should pay attention to an increase in hedge fund interest lately. Agora, Inc. (NASDAQ:API) was in 17 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 29. There were 14 hedge funds in our database with API positions at the end of the fourth quarter. Our calculations also showed that API isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In today’s marketplace there are a large number of gauges shareholders put to use to assess publicly traded companies. Two of the most innovative gauges are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the elite money managers can outpace the market by a very impressive margin (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Frank Brosens Taconic Capital
Frank Brosens Taconic Capital

Frank Brosens of Taconic Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 let's view the key hedge fund action encompassing Agora, Inc. (NASDAQ:API).

Do Hedge Funds Think API Is A Good Stock To Buy Now?

At the end of March, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 21% from the previous quarter. The graph below displays the number of hedge funds with bullish position in API over the last 23 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is API A Good Stock To Buy?
Is API A Good Stock To Buy?

The largest stake in Agora, Inc. (NASDAQ:API) was held by Coatue Management, which reported holding $480.7 million worth of stock at the end of December. It was followed by Tiger Global Management LLC with a $86.8 million position. Other investors bullish on the company included ARK Investment Management, Himension Capital, and Berylson Capital Partners. In terms of the portfolio weights assigned to each position Himension Capital allocated the biggest weight to Agora, Inc. (NASDAQ:API), around 4.23% of its 13F portfolio. Berylson Capital Partners is also relatively very bullish on the stock, designating 3.93 percent of its 13F equity portfolio to API.

As industrywide interest jumped, key hedge funds were breaking ground themselves. Jericho Capital Asset Management, managed by Josh Resnick, assembled the most outsized position in Agora, Inc. (NASDAQ:API). Jericho Capital Asset Management had $14.9 million invested in the company at the end of the quarter. Leung Chi Kit's Kadensa Capital also made a $4.6 million investment in the stock during the quarter. The following funds were also among the new API investors: Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors, Seth Fischer's Oasis Management, and Frank Brosens's Taconic Capital.

Let's now review hedge fund activity in other stocks similar to Agora, Inc. (NASDAQ:API). We will take a look at Primerica, Inc. (NYSE:PRI), HollyFrontier Corporation (NYSE:HFC), Foot Locker, Inc. (NYSE:FL), Kodiak Sciences Inc (NASDAQ:KOD), Pilgrim's Pride Corporation (NASDAQ:PPC), Corelogic Inc (NYSE:CLGX), and Regal Beloit Corporation (NYSE:RBC). All of these stocks' market caps are closest to API's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PRI,20,498557,-11 HFC,20,157103,-14 FL,28,332073,2 KOD,17,1806649,-3 PPC,16,122066,-1 CLGX,49,1690451,3 RBC,30,358632,5 Average,25.7,709362,-2.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.7 hedge funds with bullish positions and the average amount invested in these stocks was $709 million. That figure was $740 million in API's case. Corelogic Inc (NYSE:CLGX) is the most popular stock in this table. On the other hand Pilgrim's Pride Corporation (NASDAQ:PPC) is the least popular one with only 16 bullish hedge fund positions. Agora, Inc. (NASDAQ:API) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for API is 27.1. 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. 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 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 28.5% in 2021 through July 23rd and surpassed the market again by 10.1 percentage points. Unfortunately API wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); API investors were disappointed as the stock returned -48.3% since the end of March (through 7/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.