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Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Momo Inc (NASDAQ:MOMO), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is MOMO stock a buy? Momo Inc (NASDAQ:MOMO) investors should pay attention to a decrease in activity from the world's largest hedge funds lately. Momo Inc (NASDAQ:MOMO) was in 24 hedge funds' portfolios at the end of December. The all time high for this statistic is 45. Our calculations also showed that MOMO isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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James Dinan of York Capital Management
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Do Hedge Funds Think MOMO Is A Good Stock To Buy Now?
At Q4's end, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MOMO over the last 22 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Momo Inc (NASDAQ:MOMO), which was worth $194.7 million at the end of the fourth quarter. On the second spot was Tiger Pacific Capital which amassed $31.6 million worth of shares. Yiheng Capital, LMR Partners, and York Capital Management were 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 Tiger Pacific Capital allocated the biggest weight to Momo Inc (NASDAQ:MOMO), around 5.83% of its 13F portfolio. Dalton Investments is also relatively very bullish on the stock, designating 3.11 percent of its 13F equity portfolio to MOMO.
Judging by the fact that Momo Inc (NASDAQ:MOMO) has faced declining sentiment from the smart money, it's easy to see that there is a sect of money managers that elected to cut their full holdings last quarter. Interestingly, Ted Kang's Kylin Management sold off the largest position of the 750 funds tracked by Insider Monkey, comprising close to $18.2 million in stock, and Ken Griffin's Citadel Investment Group was right behind this move, as the fund dumped about $6.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 6 funds last quarter.
Let's now review hedge fund activity in other stocks similar to Momo Inc (NASDAQ:MOMO). These stocks are GATX Corporation (NYSE:GATX), H&R Block, Inc. (NYSE:HRB), FirstCash, Inc. (NASDAQ:FCFS), Rogers Corporation (NYSE:ROG), Six Flags Entertainment Corp (NYSE:SIX), Energizer Holdings, Inc. (NYSE:ENR), and Mercury General Corporation (NYSE:MCY). This group of stocks' market values are closest to MOMO's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GATX,12,177816,2 HRB,23,250118,-1 FCFS,17,160820,-4 ROG,20,140673,1 SIX,41,941726,4 ENR,26,170004,-2 MCY,18,159104,-3 Average,22.4,285752,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.4 hedge funds with bullish positions and the average amount invested in these stocks was $286 million. That figure was $342 million in MOMO's case. Six Flags Entertainment Corp (NYSE:SIX) is the most popular stock in this table. On the other hand GATX Corporation (NYSE:GATX) is the least popular one with only 12 bullish hedge fund positions. Momo Inc (NASDAQ:MOMO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MOMO is 35.7. 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 positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and beat the market again by 0.9 percentage points. Unfortunately MOMO wasn't nearly as popular as these 30 stocks and hedge funds that were betting on MOMO were disappointed as the stock returned 9.3% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.