In this article we will analyze whether Uxin Limited (NASDAQ:UXIN) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Uxin Limited (NASDAQ:UXIN) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds' portfolios at the end of March. Our calculations also showed that UXIN isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare UXIN to other stocks including Village Super Market, Inc. (NASDAQ:VLGEA), Cardiff Oncology, Inc. (NASDAQ:CRDF), and Central Puerto S.A. (NYSE:CEPU) to get a better sense of its popularity.
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Lei Zhang of Hillhouse Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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. With all of this in mind let's take a look at the key hedge fund action encompassing Uxin Limited (NASDAQ:UXIN).
Do Hedge Funds Think UXIN Is A Good Stock To Buy Now?
At Q1's end, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards UXIN over the last 23 quarters. With hedgies' capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Among these funds, Hillhouse Capital Management held the most valuable stake in Uxin Limited (NASDAQ:UXIN), which was worth $2.7 million at the end of the fourth quarter. On the second spot was Renaissance Technologies which amassed $2.4 million worth of shares. Citadel Investment Group was also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Hillhouse Capital Management allocated the biggest weight to Uxin Limited (NASDAQ:UXIN), around 0.03% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.003 percent of its 13F equity portfolio to UXIN.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Two Sigma Advisors. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Renaissance Technologies).
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Uxin Limited (NASDAQ:UXIN) but similarly valued. We will take a look at Village Super Market, Inc. (NASDAQ:VLGEA), Cardiff Oncology, Inc. (NASDAQ:CRDF), Central Puerto S.A. (NYSE:CEPU), Vitru Limited (NASDAQ:VTRU), Viracta Therapeutics, Inc. (NASDAQ:VIRX), Nanobiotix S.A. (NASDAQ:NBTX), and Misonix, Inc. (NASDAQ:MSON). All of these stocks' market caps are similar to UXIN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VLGEA,7,30340,-3 CRDF,13,63864,-5 CEPU,3,1345,-1 VTRU,3,8866,-3 VIRX,13,65765,8 NBTX,5,36041,-1 MSON,7,46305,-2 Average,7.3,36075,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.3 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $5 million in UXIN's case. Cardiff Oncology, Inc. (NASDAQ:CRDF) is the most popular stock in this table. On the other hand Central Puerto S.A. (NYSE:CEPU) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Uxin Limited (NASDAQ:UXIN) is even less popular than CEPU. Our overall hedge fund sentiment score for UXIN is 12.5. 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. Hedge funds clearly dropped the ball on UXIN as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on UXIN as the stock returned 335% since Q1 (through June 11th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.