Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Wanda Sports Group Company Limited (NASDAQ:WSG).
Is Wanda Sports Group Company Limited (NASDAQ:WSG) a sound stock to buy now? Money managers are buying. The number of bullish hedge fund positions inched up by 3 in recent months. Our calculations also showed that WSG isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). WSG was in 6 hedge funds' portfolios at the end of the first quarter of 2020. There were 3 hedge funds in our database with WSG holdings at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_26073" align="aligncenter" width="400"] Jim Simons of Renaissance Technologies[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we're going to analyze the latest hedge fund action encompassing Wanda Sports Group Company Limited (NASDAQ:WSG).
What have hedge funds been doing with Wanda Sports Group Company Limited (NASDAQ:WSG)?
Heading into the second quarter of 2020, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards WSG over the last 18 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, DG Capital Management, managed by Dov Gertzulin, holds the most valuable position in Wanda Sports Group Company Limited (NASDAQ:WSG). DG Capital Management has a $2.2 million position in the stock, comprising 3.4% of its 13F portfolio. Sitting at the No. 2 spot is Madison Avenue Partners, managed by Eli Samaha, which holds a $1.6 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Some other peers with similar optimism consist of Anand Parekh's Alyeska Investment Group, Joshua Friedman and Mitchell Julis's Canyon Capital Advisors and Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors. In terms of the portfolio weights assigned to each position DG Capital Management allocated the biggest weight to Wanda Sports Group Company Limited (NASDAQ:WSG), around 3.4% of its 13F portfolio. Madison Avenue Partners is also relatively very bullish on the stock, designating 0.81 percent of its 13F equity portfolio to WSG.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. DG Capital Management, managed by Dov Gertzulin, assembled the most valuable position in Wanda Sports Group Company Limited (NASDAQ:WSG). DG Capital Management had $2.2 million invested in the company at the end of the quarter. Eli Samaha's Madison Avenue Partners also made a $1.6 million investment in the stock during the quarter. The only other fund with a brand new WSG position is Renaissance Technologies.
Let's now take a look at hedge fund activity in other stocks similar to Wanda Sports Group Company Limited (NASDAQ:WSG). These stocks are Noble Midstream Partners LP (NYSE:NBLX), Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA), DSP Group, Inc. (NASDAQ:DSPG), and Enterprise Bancorp, Inc (NASDAQ:EBTC). This group of stocks' market values are similar to WSG's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NBLX,2,1267,-3 KNSA,10,148521,1 DSPG,14,53755,0 EBTC,1,1517,-3 Average,6.75,51265,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $6 million in WSG's case. DSP Group, Inc. (NASDAQ:DSPG) is the most popular stock in this table. On the other hand Enterprise Bancorp, Inc (NASDAQ:EBTC) is the least popular one with only 1 bullish hedge fund positions. Wanda Sports Group Company Limited (NASDAQ:WSG) 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th and surpassed the market by 14.2 percentage points. Unfortunately WSG wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); WSG investors were disappointed as the stock returned 14.7% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.