After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Lyft, Inc. (NASDAQ:LYFT).
Is LYFT a good stock to buy? Lyft, Inc. (NASDAQ:LYFT) investors should pay attention to an increase in activity from the world's largest hedge funds in recent months. Lyft, Inc. (NASDAQ:LYFT) was in 32 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 71. Our calculations also showed that LYFT isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 website. Now let's take a peek at the recent hedge fund action surrounding Lyft, Inc. (NASDAQ:LYFT).
Do Hedge Funds Think LYFT Is A Good Stock To Buy Now?
At Q3's end, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in LYFT over the last 21 quarters. With hedgies' capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in Lyft, Inc. (NASDAQ:LYFT). Citadel Investment Group has a $219.7 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, which holds a $64.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish encompass Josh Resnick's Jericho Capital Asset Management, Michael Rockefeller and KarláKroeker's Woodline Partners and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Glade Brook Capital Partners allocated the biggest weight to Lyft, Inc. (NASDAQ:LYFT), around 3.27% of its 13F portfolio. Ancient Art (Teton Capital) is also relatively very bullish on the stock, dishing out 2 percent of its 13F equity portfolio to LYFT.
As industrywide interest jumped, key hedge funds were leading the bulls' herd. Jericho Capital Asset Management, managed by Josh Resnick, established the most valuable position in Lyft, Inc. (NASDAQ:LYFT). Jericho Capital Asset Management had $37.3 million invested in the company at the end of the quarter. Steve Cohen's Point72 Asset Management also initiated a $15.8 million position during the quarter. The following funds were also among the new LYFT investors: Quincy Lee's Ancient Art (Teton Capital), Joseph Samuels's Islet Management, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Lyft, Inc. (NASDAQ:LYFT) but similarly valued. We will take a look at Aspen Technology, Inc. (NASDAQ:AZPN), Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), Farfetch Limited (NYSE:FTCH), GDS Holdings Limited (NASDAQ:GDS), Sociedad Quimica y Minera (NYSE:SQM), The Scotts Miracle-Gro Company (NYSE:SMG), and A. O. Smith Corporation (NYSE:AOS). This group of stocks' market caps match LYFT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AZPN,26,1094956,-2 KOF,6,332919,1 FTCH,40,1224948,3 GDS,47,2723060,4 SQM,12,115706,-2 SMG,31,292026,1 AOS,30,435487,-5 Average,27.4,888443,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.4 hedge funds with bullish positions and the average amount invested in these stocks was $888 million. That figure was $542 million in LYFT's case. GDS Holdings Limited (NASDAQ:GDS) is the most popular stock in this table. On the other hand Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is the least popular one with only 6 bullish hedge fund positions. Lyft, Inc. (NASDAQ:LYFT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LYFT is 52.2. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on LYFT as the stock returned 81.4% since the end of Q3 (through 12/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.