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Were Hedge Funds Right About Piling Into ANGI Homeservices Inc (ANGI)?

Abigail Fisher
·5 min read

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtANGI Homeservices Inc (NASDAQ:ANGI) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.

Is ANGI Homeservices Inc (NASDAQ:ANGI) the right pick for your portfolio? Investors who are in the know were in a bullish mood. The number of long hedge fund bets improved by 4 lately. Our calculations also showed that ANGI 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). Video: Watch our video about the top 5 most popular hedge fund stocks.

To the average investor there are dozens of methods market participants employ to assess publicly traded companies. Two of the most underrated methods are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the elite investment managers can outclass the S&P 500 by a significant amount (see the details here).

[caption id="attachment_690797" align="aligncenter" width="393"] Sahm Adrangi of Kerrisdale Capital[/caption]

Sahm Adrangi Kerrisdale Capital
Sahm Adrangi Kerrisdale Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a "weekend trading strategy", so we look into his strategy's picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller's investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to check out the recent hedge fund action encompassing ANGI Homeservices Inc (NASDAQ:ANGI).

How have hedgies been trading ANGI Homeservices Inc (NASDAQ:ANGI)?

At the end of the first quarter, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ANGI over the last 18 quarters. With the smart money's sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

The largest stake in ANGI Homeservices Inc (NASDAQ:ANGI) was held by Luxor Capital Group, which reported holding $56.9 million worth of stock at the end of September. It was followed by ShawSpring Partners with a $32.1 million position. Other investors bullish on the company included Renaissance Technologies, Echo Street Capital Management, and Ulysses Management. In terms of the portfolio weights assigned to each position ShawSpring Partners allocated the biggest weight to ANGI Homeservices Inc (NASDAQ:ANGI), around 11.37% of its 13F portfolio. Ulysses Management is also relatively very bullish on the stock, earmarking 2.91 percent of its 13F equity portfolio to ANGI.

With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Park West Asset Management, managed by Peter S. Park, created the biggest position in ANGI Homeservices Inc (NASDAQ:ANGI). Park West Asset Management had $6.6 million invested in the company at the end of the quarter. Sahm Adrangi's Kerrisdale Capital also made a $4.2 million investment in the stock during the quarter. The other funds with brand new ANGI positions are Ben Gordon's Blue Grotto Capital, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, and Greg Eisner's Engineers Gate Manager.

Let's check out hedge fund activity in other stocks similar to ANGI Homeservices Inc (NASDAQ:ANGI). These stocks are Marathon Oil Corporation (NYSE:MRO), World Wrestling Entertainment, Inc. (NYSE:WWE), Yamana Gold Inc. (NYSE:AUY), and Power Integrations Inc (NASDAQ:POWI). This group of stocks' market caps resemble ANGI's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MRO,24,93423,-6 WWE,31,374902,1 AUY,14,212094,-2 POWI,21,76700,4 Average,22.5,189280,-0.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $189 million. That figure was $232 million in ANGI's case. World Wrestling Entertainment, Inc. (NYSE:WWE) is the most popular stock in this table. On the other hand Yamana Gold Inc. (NYSE:AUY) is the least popular one with only 14 bullish hedge fund positions. ANGI Homeservices Inc (NASDAQ:ANGI) is not the most popular stock in this group but hedge fund interest is still above average. 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 12.3% in 2020 through June 30th but still beat the market by 15.5 percentage points. Hedge funds were also right about betting on ANGI as the stock returned 131.4% in Q2 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.

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