The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider WW International, Inc. (NASDAQ:WW) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
WW International, Inc. (NASDAQ:WW) investors should pay attention to a decrease in support from the world’s most elite money managers in recent months. WW International, Inc. (NASDAQ:WW) was in 28 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 37. There were 32 hedge funds in our database with WW holdings at the end of December. Our calculations also showed that WW isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind let’s view the latest hedge fund action surrounding WW International, Inc. (NASDAQ:WW).
Do Hedge Funds Think WW Is A Good Stock To Buy Now?
At first quarter’s end, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from the fourth quarter of 2020. On the other hand, there were a total of 22 hedge funds with a bullish position in WW a year ago. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
The largest stake in WW International, Inc. (NASDAQ:WW) was held by Miller Value Partners, which reported holding $93.6 million worth of stock at the end of December. It was followed by Sessa Capital with a $78.6 million position. Other investors bullish on the company included Melvin Capital Management, Stadium Capital Management, and ThornTree Capital Partners. In terms of the portfolio weights assigned to each position 0 allocated the biggest weight to WW International, Inc. (NASDAQ:WW), around 31.65% of its 13F portfolio. 0 is also relatively very bullish on the stock, earmarking 4.43 percent of its 13F equity portfolio to WW.
Judging by the fact that WW International, Inc. (NASDAQ:WW) has faced declining sentiment from the smart money, we can see that there was a specific group of hedgies that elected to cut their entire stakes in the first quarter. It’s worth mentioning that Joe Milano’s Greenhouse Funds cut the biggest investment of the 750 funds tracked by Insider Monkey, worth close to $32.1 million in stock, and Clint Murray’s Lodge Hill Capital was right behind this move, as the fund sold off about $9.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 4 funds in the first quarter.
Let’s now review hedge fund activity in other stocks similar to WW International, Inc. (NASDAQ:WW). We will take a look at ON24, Inc. (NYSE:ONTF), Piedmont Office Realty Trust, Inc. (NYSE:PDM), Vector Group Ltd (NYSE:VGR), Edgewell Personal Care Company (NYSE:EPC), Velodyne Lidar, Inc. (NASDAQ:VLDR), FinVolution Group (NYSE:FINV), and Trustmark Corp (NASDAQ:TRMK). All of these stocks’ market caps match WW’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.1 hedge funds with bullish positions and the average amount invested in these stocks was $94 million. That figure was $466 million in WW’s case. Edgewell Personal Care Company (NYSE:EPC) is the most popular stock in this table. On the other hand Trustmark Corp (NASDAQ:TRMK) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks WW International, Inc. (NASDAQ:WW) is more popular among hedge funds. Our overall hedge fund sentiment score for WW is 73.7. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through July 9th and still beat the market by 6.7 percentage points. Unfortunately WW wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on WW were disappointed as the stock returned 7.8% since the end of the first quarter (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.