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In this article we will check out the progression of hedge fund sentiment towards Meten EdtechX Education Group Ltd. (NASDAQ:METX) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Meten EdtechX Education Group Ltd. (NASDAQ:METX) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds' portfolios at the end of September. Our calculations also showed that METX 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). At the end of this article we will also compare METX to other stocks including Conn's, Inc. (NASDAQ:CONN), HBT Financial, Inc. (NASDAQ:HBT), and Galiano Gold Inc. (NYSE:GAU) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most shareholders, hedge funds are viewed as worthless, outdated investment tools of yesteryear. While there are over 8000 funds with their doors open at the moment, We choose to focus on the leaders of this club, about 850 funds. It is estimated that this group of investors manage bulk of the smart money's total capital, and by tracking their unrivaled investments, Insider Monkey has determined several investment strategies that have historically outperformed the market. Insider Monkey's flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Paul Glazer of Glazer Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world 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 review the latest hedge fund action regarding Meten EdtechX Education Group Ltd. (NASDAQ:METX).
What does smart money think about Meten EdtechX Education Group Ltd. (NASDAQ:METX)?
At the end of September, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in METX over the last 21 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
More specifically, Glazer Capital was the largest shareholder of Meten EdtechX Education Group Ltd. (NASDAQ:METX), with a stake worth $0 million reported as of the end of September. Trailing Glazer Capital was 683 Capital Partners, which amassed a stake valued at $0 million. Weiss Asset Management 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 683 Capital Partners allocated the biggest weight to Meten EdtechX Education Group Ltd. (NASDAQ:METX), around 0.0019% of its 13F portfolio. Glazer Capital is also relatively very bullish on the stock, setting aside 0.0017 percent of its 13F equity portfolio to METX.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Meten EdtechX Education Group Ltd. (NASDAQ:METX) but similarly valued. These stocks are Conn's, Inc. (NASDAQ:CONN), HBT Financial, Inc. (NASDAQ:HBT), Galiano Gold Inc. (NYSE:GAU), Willdan Group, Inc. (NASDAQ:WLDN), Farmers National Banc Corp (NASDAQ:FMNB), Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX), and CytomX Therapeutics, Inc. (NASDAQ:CTMX). All of these stocks' market caps are closest to METX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CONN,14,21354,-2 HBT,9,10415,3 GAU,6,42056,1 WLDN,3,8995,-1 FMNB,9,7526,1 CPRX,17,57604,-5 CTMX,20,74703,-2 Average,11.1,31808,-0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.1 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $0 million in METX's case. CytomX Therapeutics, Inc. (NASDAQ:CTMX) is the most popular stock in this table. On the other hand Willdan Group, Inc. (NASDAQ:WLDN) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Meten EdtechX Education Group Ltd. (NASDAQ:METX) is even less popular than WLDN. Our overall hedge fund sentiment score for METX is 20. 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. Hedge funds dodged a bullet by taking a bearish stance towards METX. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd but managed to beat the market again by 15.4 percentage points. Unfortunately METX wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); METX investors were disappointed as the stock returned -47.3% since the end of the third quarter (through 11/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.