Is Formula One Group (NASDAQ:FWONA) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
At the moment there are tons of metrics shareholders have at their disposal to grade publicly traded companies. A couple of the most useful metrics are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the elite fund managers can trounce their index-focused peers by a solid margin (see the details here).
We're going to take a peek at the fresh hedge fund action surrounding Formula One Group (NASDAQ:FWONA).
How are hedge funds trading Formula One Group (NASDAQ:FWONA)?
At Q1's end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards FWONA over the last 15 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
More specifically, Ancient Art (Teton Capital) was the largest shareholder of Formula One Group (NASDAQ:FWONA), with a stake worth $88.3 million reported as of the end of March. Trailing Ancient Art (Teton Capital) was Southeastern Asset Management, which amassed a stake valued at $79.8 million. Odey Asset Management Group, Ashe Capital, and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, key hedge funds have jumped into Formula One Group (NASDAQ:FWONA) headfirst. D E Shaw, managed by D. E. Shaw, assembled the most outsized position in Formula One Group (NASDAQ:FWONA). D E Shaw had $19.4 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $8.4 million investment in the stock during the quarter. The following funds were also among the new FWONA investors: Noam Gottesman's GLG Partners, Howard Marks's Oaktree Capital Management, and Steve Cohen's Point72 Asset Management.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Formula One Group (NASDAQ:FWONA) but similarly valued. These stocks are Etsy Inc (NASDAQ:ETSY), SEI Investments Company (NASDAQ:SEIC), Athene Holding Ltd. (NYSE:ATH), and Neurocrine Biosciences, Inc. (NASDAQ:NBIX). This group of stocks' market valuations resemble FWONA's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ETSY,39,1202165,0 SEIC,24,334310,-1 ATH,35,1311162,-8 NBIX,35,1105095,-2 Average,33.25,988183,-2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.25 hedge funds with bullish positions and the average amount invested in these stocks was $988 million. That figure was $321 million in FWONA's case. Etsy Inc (NASDAQ:ETSY) is the most popular stock in this table. On the other hand SEI Investments Company (NASDAQ:SEIC) is the least popular one with only 24 bullish hedge fund positions. Compared to these stocks Formula One Group (NASDAQ:FWONA) is even less popular than SEIC. Hedge funds clearly dropped the ball on FWONA as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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. A small number of hedge funds were also right about betting on FWONA as the stock returned 4.9% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.