Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 15 S&P 500 stocks among hedge funds at the end of December 2018 yielded an average return of 19.7% year-to-date, vs. a gain of 13.1% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Jianpu Technology Inc. (NYSE:JT).
Jianpu Technology Inc. (NYSE:JT) was in 5 hedge funds' portfolios at the end of the fourth quarter of 2018. JT shareholders have witnessed an increase in support from the world's most elite money managers recently. There were 4 hedge funds in our database with JT positions at the end of the previous quarter. Our calculations also showed that JT isn't among the 30 most popular stocks among hedge funds.
According to most shareholders, hedge funds are seen as unimportant, outdated financial tools of the past. While there are more than 8000 funds with their doors open today, We hone in on the elite of this group, about 750 funds. Most estimates calculate that this group of people preside over the lion's share of the smart money's total capital, and by tracking their best stock picks, Insider Monkey has brought to light numerous investment strategies that have historically outperformed Mr. Market. Insider Monkey's flagship hedge fund strategy surpassed the S&P 500 index by nearly 5 percentage points per year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
We're going to take a peek at the recent hedge fund action regarding Jianpu Technology Inc. (NYSE:JT).
What have hedge funds been doing with Jianpu Technology Inc. (NYSE:JT)?
At the end of the fourth quarter, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in JT over the last 14 quarters. With hedgies' capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
More specifically, Yiheng Capital was the largest shareholder of Jianpu Technology Inc. (NYSE:JT), with a stake worth $25.3 million reported as of the end of December. Trailing Yiheng Capital was Granite Point Capital, which amassed a stake valued at $2.1 million. Renaissance Technologies, Citadel Investment Group, and Arrowstreet Capital were also very fond of the stock, giving the stock large weights in their portfolios.
As aggregate interest increased, some big names have jumped into Jianpu Technology Inc. (NYSE:JT) headfirst. Yiheng Capital, managed by Jonathan Guo, assembled the most valuable position in Jianpu Technology Inc. (NYSE:JT). Yiheng Capital had $25.3 million invested in the company at the end of the quarter. Jim Simons's Renaissance Technologies also initiated a $0.3 million position during the quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Jianpu Technology Inc. (NYSE:JT) but similarly valued. These stocks are Ruth's Hospitality Group, Inc. (NASDAQ:RUTH), Alder Biopharmaceuticals Inc (NASDAQ:ALDR), Hanger, Inc. (NYSE:HNGR), and Kraton Corporation (NYSE:KRA). This group of stocks' market valuations are similar to JT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RUTH,17,50161,2 ALDR,15,207447,-1 HNGR,18,193919,1 KRA,17,50586,-5 Average,16.75,125528,-0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $126 million. That figure was $28 million in JT's case. Hanger, Inc. (NYSE:HNGR) is the most popular stock in this table. On the other hand Alder Biopharmaceuticals Inc (NASDAQ:ALDR) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Jianpu Technology Inc. (NYSE:JT) is even less popular than ALDR. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on JT, though not to the same extent, as the stock returned 20.1% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.