Hedge Funds Are Selling Playtika Holding Corp. (PLTK)

In this article we will check out the progression of hedge fund sentiment towards Playtika Holding Corp. (NASDAQ:PLTK) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Playtika Holding Corp. (NASDAQ:PLTK) shareholders have witnessed a decrease in activity from the world’s largest hedge funds recently. Playtika Holding Corp. (NASDAQ:PLTK) was in 25 hedge funds’ portfolios at the end of September. The all time high for this statistic is 26. Our calculations also showed that PLTK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Keeping this in mind let’s view the latest hedge fund action surrounding Playtika Holding Corp. (NASDAQ:PLTK).

Do Hedge Funds Think PLTK Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from one quarter earlier. On the other hand, there were a total of 0 hedge funds with a bullish position in PLTK a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Playtika Holding Corp. (NASDAQ:PLTK) was held by Tiger Global Management LLC, which reported holding $152 million worth of stock at the end of September. It was followed by Rima Senvest Management with a $121.1 million position. Other investors bullish on the company included Hillhouse Capital Management, Woodline Partners, and Point72 Asset Management. In terms of the portfolio weights assigned to each position Yarra Square Partners allocated the biggest weight to Playtika Holding Corp. (NASDAQ:PLTK), around 4.98% of its 13F portfolio. Rima Senvest Management is also relatively very bullish on the stock, earmarking 3.46 percent of its 13F equity portfolio to PLTK.

Because Playtika Holding Corp. (NASDAQ:PLTK) has faced bearish sentiment from the smart money, it’s safe to say that there was a specific group of hedgies that elected to cut their entire stakes heading into Q4. Interestingly, Stuart J. Zimmer’s Zimmer Partners cut the biggest position of all the hedgies monitored by Insider Monkey, comprising about $24.7 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund sold off about $15.1 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 1 funds heading into Q4.

Let’s check out hedge fund activity in other stocks similar to Playtika Holding Corp. (NASDAQ:PLTK). These stocks are Fair Isaac Corporation (NYSE:FICO), Black Knight, Inc. (NYSE:BKI), Snap-on Incorporated (NYSE:SNA), Targa Resources Corp (NYSE:TRGP), Robert Half International Inc. (NYSE:RHI), UWM Holdings Corporation (NYSE:UWMC), and Morningstar, Inc. (NASDAQ:MORN). All of these stocks’ market caps match PLTK’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 28.4 hedge funds with bullish positions and the average amount invested in these stocks was $699 million. That figure was $520 million in PLTK’s case. Black Knight, Inc. (NYSE:BKI) is the most popular stock in this table. On the other hand UWM Holdings Corporation (NYSE:UWMC) is the least popular one with only 16 bullish hedge fund positions. Playtika Holding Corp. (NASDAQ:PLTK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PLTK is 53.3. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately PLTK wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); PLTK investors were disappointed as the stock returned -33.5% since the end of September (through 12/9) 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 in 2021.

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