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Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Lyft, Inc. (NASDAQ:LYFT).
Is LYFT a good stock to buy? Lyft, Inc. (NASDAQ:LYFT) shareholders have witnessed an increase in hedge fund interest in recent months. Lyft, Inc. (NASDAQ:LYFT) was in 60 hedge funds' portfolios at the end of March. The all time high for this statistic is 71. There were 52 hedge funds in our database with LYFT positions at the end of the fourth quarter. Our calculations also showed that LYFT isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the eyes of most traders, hedge funds are seen as worthless, old financial vehicles of yesteryear. While there are more than 8000 funds with their doors open at present, We hone in on the bigwigs of this group, about 850 funds. These hedge fund managers direct the majority of the hedge fund industry's total capital, and by observing their inimitable stock picks, Insider Monkey has unearthed many investment strategies that have historically outrun the market. Insider Monkey's flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. 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 .
Harold Levy of Iridian Asset Management
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Do Hedge Funds Think LYFT Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 60 of the hedge funds tracked by Insider Monkey were long this stock, a change of 15% from the previous quarter. The graph below displays the number of hedge funds with bullish position in LYFT over the last 23 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Alkeon Capital Management, managed by Panayotis Takis Sparaggis, holds the number one position in Lyft, Inc. (NASDAQ:LYFT). Alkeon Capital Management has a $321.4 million position in the stock, comprising 0.5% of its 13F portfolio. On Alkeon Capital Management's heels is Ken Griffin of Citadel Investment Group, with a $256.9 million call position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism consist of Nicolai Tangen's Ako Capital, Ken Griffin's Citadel Investment Group and David Cohen and Harold Levy's Iridian Asset Management. In terms of the portfolio weights assigned to each position Engle Capital allocated the biggest weight to Lyft, Inc. (NASDAQ:LYFT), around 14.39% of its 13F portfolio. Anomaly Capital Management is also relatively very bullish on the stock, setting aside 5.59 percent of its 13F equity portfolio to LYFT.
As aggregate interest increased, specific money managers have jumped into Lyft, Inc. (NASDAQ:LYFT) headfirst. Alkeon Capital Management, managed by Panayotis Takis Sparaggis, established the largest position in Lyft, Inc. (NASDAQ:LYFT). Alkeon Capital Management had $321.4 million invested in the company at the end of the quarter. Nicolai Tangen's Ako Capital also initiated a $160.4 million position during the quarter. The other funds with new positions in the stock are Alexander Mitchell's Scopus Asset Management, Panayotis Takis Sparaggis's Alkeon Capital Management, and Ben Jacobs's Anomaly Capital Management.
Let's now review hedge fund activity in other stocks similar to Lyft, Inc. (NASDAQ:LYFT). These stocks are Ameren Corporation (NYSE:AEE), Energy Transfer L.P. (NYSE:ET), Qorvo Inc (NASDAQ:QRVO), ORIX Corporation (NYSE:IX), Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), Ingersoll Rand Inc. (NYSE:IR), and Generac Holdings Inc. (NYSE:GNRC). This group of stocks' market values are closest to LYFT's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AEE,19,266021,0 ET,25,647725,0 QRVO,41,2329699,-10 IX,5,4886,2 HZNP,48,4177404,-7 IR,35,789022,1 GNRC,36,699301,4 Average,29.9,1273437,-1.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.9 hedge funds with bullish positions and the average amount invested in these stocks was $1273 million. That figure was $1955 million in LYFT's case. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) is the most popular stock in this table. On the other hand ORIX Corporation (NYSE:IX) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Lyft, Inc. (NASDAQ:LYFT) is more popular among hedge funds. Our overall hedge fund sentiment score for LYFT is 85.4. 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. 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. Unfortunately LYFT wasn't nearly as popular as these 5 stocks and hedge funds that were betting on LYFT were disappointed as the stock returned -11.2% since the end of the first quarter (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 since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.