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Blue Apron Holdings, Inc. (APRN): Are Hedge Funds Right About This Stock?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Blue Apron Holdings, Inc. (NYSE:APRN) based on that data and determine whether they were really smart about the stock.

Blue Apron Holdings, Inc. (NYSE:APRN) was in 10 hedge funds’ portfolios at the end of the first quarter of 2020. APRN has experienced an increase in hedge fund interest in recent months. There were 9 hedge funds in our database with APRN holdings at the end of the previous quarter. Our calculations also showed that APRN 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.

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Christian Leone of Luxor Capital Group

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. Keeping this in mind let’s analyze the key hedge fund action regarding Blue Apron Holdings, Inc. (NYSE:APRN).

How are hedge funds trading Blue Apron Holdings, Inc. (NYSE:APRN)?

At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from one quarter earlier. By comparison, 7 hedge funds held shares or bullish call options in APRN a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

Among these funds, Tenzing Global Investors held the most valuable stake in Blue Apron Holdings, Inc. (NYSE:APRN), which was worth $6.6 million at the end of the third quarter. On the second spot was D E Shaw which amassed $5.4 million worth of shares. Slate Path Capital, Citadel Investment Group, and Maverick Capital were 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 Tenzing Global Investors allocated the biggest weight to Blue Apron Holdings, Inc. (NYSE:APRN), around 3.66% of its 13F portfolio. Slate Path Capital is also relatively very bullish on the stock, dishing out 0.27 percent of its 13F equity portfolio to APRN.

As aggregate interest increased, some big names have been driving this bullishness. Maverick Capital, managed by Lee Ainslie, established the biggest position in Blue Apron Holdings, Inc. (NYSE:APRN). Maverick Capital had $2.7 million invested in the company at the end of the quarter. Christian Leone’s Luxor Capital Group also initiated a $2.5 million position during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s also examine hedge fund activity in other stocks similar to Blue Apron Holdings, Inc. (NYSE:APRN). We will take a look at BiomX Inc. (NYSE:PHGE), RedHill Biopharma Ltd (NASDAQ:RDHL), Summit Therapeutics PLC (NASDAQ:SMMT), and Exterran Corporation (NYSE:EXTN). All of these stocks’ market caps are closest to APRN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PHGE 8 18324 0
RDHL 2 652 -1
SMMT 3 18718 0
EXTN 14 13849 -6
Average 6.75 12886 -1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was $25 million in APRN’s case. Exterran Corporation (NYSE:EXTN) is the most popular stock in this table. On the other hand RedHill Biopharma Ltd (NASDAQ:RDHL) is the least popular one with only 2 bullish hedge fund positions. Blue Apron Holdings, Inc. (NYSE:APRN) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 beat the market by 15.5 percentage points. Unfortunately APRN wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on APRN were disappointed as the stock returned -8% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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Disclosure: None. This article was originally published at Insider Monkey.