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We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn't mean that they don't have occasional colossal losses; they do (like Melvin Capital's recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Irsa Inversiones y Rprsntcins SA (NYSE:IRS).
Irsa Inversiones y Rprsntcins SA (NYSE:IRS) investors should pay attention to a decrease in support from the world's most elite money managers lately. Irsa Inversiones y Rprsntcins SA (NYSE:IRS) was in 3 hedge funds' portfolios at the end of March. The all time high for this statistic is 14. Our calculations also showed that IRS isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
To the average investor there are several tools shareholders employ to appraise stocks. Some of the most underrated tools are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the elite money managers can trounce the S&P 500 by a superb amount (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 .
Jim Simons of Renaissance Technologies
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $26 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. Now let's take a glance at the fresh hedge fund action encompassing Irsa Inversiones y Rprsntcins SA (NYSE:IRS).
Do Hedge Funds Think IRS Is A Good Stock To Buy Now?
At first quarter's end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of -40% from the previous quarter. On the other hand, there were a total of 6 hedge funds with a bullish position in IRS a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Autonomy Capital held the most valuable stake in Irsa Inversiones y Rprsntcins SA (NYSE:IRS), which was worth $10.3 million at the end of the fourth quarter. On the second spot was 683 Capital Partners which amassed $4.5 million worth of shares. Brigade Capital 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 Autonomy Capital allocated the biggest weight to Irsa Inversiones y Rprsntcins SA (NYSE:IRS), around 1.02% of its 13F portfolio. 683 Capital Partners is also relatively very bullish on the stock, earmarking 0.24 percent of its 13F equity portfolio to IRS.
Seeing as Irsa Inversiones y Rprsntcins SA (NYSE:IRS) has faced declining sentiment from hedge fund managers, it's safe to say that there exists a select few hedge funds that decided to sell off their entire stakes by the end of the first quarter. Interestingly, Renaissance Technologies cut the largest stake of all the hedgies watched by Insider Monkey, worth an estimated $0.2 million in stock. Israel Englander's fund, Millennium Management, also sold off its stock, about $0.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds by the end of the first quarter.
Let's now review hedge fund activity in other stocks similar to Irsa Inversiones y Rprsntcins SA (NYSE:IRS). These stocks are Red Violet, Inc. (NASDAQ:RDVT), Larimar Therapeutics, Inc. (NASDAQ:LRMR), Vista Oil & Gas, S.A.B. de C.V. (NYSE:VIST), Citius Pharmaceuticals, Inc. (NASDAQ:CTXR), Calyxt, Inc. (NASDAQ:CLXT), CompX International Inc. (NYSE:CIX), and LCNB Corp. (NASDAQ:LCNB). This group of stocks' market values are closest to IRS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RDVT,3,32917,-1 LRMR,20,155078,3 VIST,9,20667,-2 CTXR,5,2783,2 CLXT,5,1191,1 CIX,4,11901,0 LCNB,1,3072,-2 Average,6.7,32516,0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.7 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $15 million in IRS's case. Larimar Therapeutics, Inc. (NASDAQ:LRMR) is the most popular stock in this table. On the other hand LCNB Corp. (NASDAQ:LCNB) is the least popular one with only 1 bullish hedge fund positions. Irsa Inversiones y Rprsntcins SA (NYSE:IRS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IRS is 14.7. 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 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately IRS wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); IRS investors were disappointed as the stock returned 1.3% since the end of March (through 6/11) 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.