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Hedge Funds Aren’t Crazy About 21Vianet Group Inc (VNET) Anymore

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Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the third quarter we observed increased volatility and small-cap stocks underperformed the market. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards 21Vianet Group Inc (NASDAQ:VNET) to find out whether it was one of their high conviction long-term ideas.

Is 21Vianet Group Inc worth your attention right now? Investors who are in the know are taking a pessimistic view. The number of long hedge fund positions was trimmed by 2 lately. At the end of this article we will also compare VNET to other stocks, including Galapagos NV (ADR) (NASDAQ:GLPG), Commercial Metals Company (NYSE:CMC), and Universal Display Corporation (NASDAQ:OLED) to get a better sense of its popularity.

In the eyes of most market participants, hedge funds are assumed to be worthless, outdated investment tools of years past. While there are more than 8000 funds in operation at the moment, Our researchers hone in on the top tier of this group, approximately 700 funds. These money managers oversee most of all hedge funds’ total capital, and by keeping an eye on their matchless equity investments, Insider Monkey has spotted a number of investment strategies that have historically outperformed Mr. Market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Now, we’re going to take a look at the key action regarding 21Vianet Group Inc (NASDAQ:VNET).

Hedge fund activity in 21Vianet Group Inc (NASDAQ:VNET)

At Q3’s end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 12% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Daniel S. Och’s OZ Management has the most valuable position in 21Vianet Group Inc (NASDAQ:VNET), worth close to $44.4 million, comprising 0.2% of its total 13F portfolio. The second most bullish fund manager is Hillhouse Capital Management, led by Lei Zhang, holding a $38.9 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish encompass Frank Brosens’s Taconic Capital, Daniel Gold’s QVT Financial and Glen Kacher’s Light Street Capital.

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