5 Small-Cap Value Stocks Hedge Funds Love

2. Lyft, Inc. (NASDAQ:LYFT)

Number of Hedge Fund Shareholders: 47

Lyft, Inc. (NASDAQ:LYFT) was a hedge fund darling upon first going public in Q1 of 2019, but smart money ownership of the stock has sunk by 37% since then. There has been a 38% jump in shareholders over the past two quarters however, and the company still ranks second on this list. Panayotis Takis Sparaggis’ Alkeon Capital Management owns the largest position in LYFT among the funds tracked by our database, owning 5.67 million shares. It’s owned the company since its market debut.

Lyft, Inc. (NASDAQ:LYFT) is facing several headwinds that have driven investors to the sidelines in recent quarters, as shares of the ride sharing operator have crashed by 69% year-to-date. Demand for the sector remains strong, but high oil prices are heavily weighing on the firm’s profit potential and broader economic concerns are also causing unease. Lyft laid off 60 people, or about 2% of its workforce, last month and shuttered its car rental program. LYFT shares trade at just 1.36x sales.

Rowan Street Capital is no longer confident about Lyft, Inc. (NASDAQ:LYFT)’s value proposition, unloading the stock in Q1 in favor of more promising positions, as revealed in its Q1 2022 investor letter:

“Lyft (NASDAQ:LYFT): We sold Lyft in Q1 ’22 to fund the acquisitions of our 3 new positions as we’ve outlined. We had owned Lyft for a little less than 3 years and realized approximately 50% gain on the stock. The new companies we bought with the proceeds from the sale are significantly better businesses, in our view.”