Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The 4 Most Popular E-Commerce Stocks Among Hedge Funds

Page 1 of 2

In the past few months the competition in the e-commerce space has become intensified, with eBay Inc (NASDAQ:EBAY) spinning off its payment subsidiary Paypal Holdings Inc (NASDAQ:PYPL) to focus on its online retailing business, as well as the launch of new entrants like, which some believe was a prime reason behind, Inc. (NASDAQ:AMZN)‘s recent Prime Day. That coupled with the recent IPO’s of Etsy Inc (NASDAQ:ETSY) and Alibaba Group Holding Ltd (NYSE:BABA) has renewed investors’ interest in the e-commerce sector. Since e-commerce still continues to be a high-growth space, a lot of investors want to allocate some part of their investment capital into it. We at Insider Monkey aim to help our readers choose which of these stocks to invest in by analyzing the data from the latest 13F’s filed for the quarter ending June 30, by the over 700 hedge funds that we track in an effort to find the top e-commerce stocks the smart money is betting on. Read on to find out which stock topped all others.

Top 10 Online Shopping Sites in the US


Most investors don’t understand hedge funds and indicators that are based on hedge funds’ activities. They ignore hedge funds because of their recent poor performance in the bull market. Our research indicates that hedge funds underperformed because they aren’t 100% long. Hedge fund fees are also very large compared to the returns generated and they reduce the net returns experienced by investors. We uncovered that hedge funds’ long positions actually outperformed the market. For instance the 15 most popular small-cap stocks among funds beat the S&P 500 Index by more than 60 percentage points since the end of August 2012. These stocks returned a cumulative of 118% vs. a 57.6% gain for the S&P 500 Index (read the details). That’s why we believe investors should pay attention to what hedge funds are buying (rather than what their net returns are).

4. Etsy Inc (NASDAQ:ETSY)

Investors with Long Positions (as of June 30): 9

Aggregate Value of Investors’ Holdings (as of June 30): $156.791 Million

After almost doubling on its debut in the secondary market in April, shares of online retailer Etsy Inc (NASDAQ:ETSY), which previously used to deal only in handmade goods and craft items, have fallen hard and are currently trading below their IPO price of $16. The two quarterly results that the company has reported after going public didn’t sit well with investors. For the most recent quarter the company posted a revenue beat, but the loss it declared was more than what the Street had estimated. Some analysts also pointed out that even the sales growth the company reported came on the back of increased advertising spending, which is unsustainable. John Griffin‘s Blue Ridge Capital was among the nine hedge funds tracked by us that disclosed a stake in the company. At the end of June, the fund owned 695,122 shares of Etsy Inc (NASDAQ:ETSY).

3. Alibaba Group Holding Ltd (NYSE:BABA)

Investors with Long Positions (as of June 30): 85

Aggregate Value of Investors’ Holdings (as of June 30): $4.76 Billion

Another e-commerce company that reported worse-than-expected results for the second quarter and has seen its shares collapse as a result is Alibaba Group Holding Ltd (NYSE:BABA). It seems hedge funds had already anticipated this, having trimmed their stakes in the company during the second quarter. If one only looks at the decline in hedge fund ownership of the company during the April-June period, which was one, that conclusion may not be apparent. However, if one looks at the aggregate value of hedge funds’ holdings, which came down by 17.83% during the quarter compared to just a 1.2% drop in Alibaba Group Holding Ltd (NYSE:BABA)’s stock price during that same period, it becomes clear that smart money had started moving out of the stock well before the 18% drop in its stock price in the third quarter. A major factor that has contributed to the decline in Alibaba’s stock price apart from weak results in the past few weeks has been the growing concern that the Chinese economy is slowing down. Among the few hedge funds that increased its stake in Alibaba Group Holding Ltd (NYSE:BABA) during the second quarter was Boykin Curry‘s Eagle Capital Management, which at the end of June owned slightly over 6.0 million shares of the company.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!