Hedge Funds Aren’t Crazy About XP Inc. (XP) Anymore

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31st, so let’s proceed with the discussion of the hedge fund sentiment on XP Inc. (NASDAQ:XP).

XP Inc. (NASDAQ:XP) was in 23 hedge funds’ portfolios at the end of March. The all time high for this statistic is 29. XP investors should pay attention to a decrease in enthusiasm from smart money lately. There were 29 hedge funds in our database with XP positions at the end of the fourth quarter. Our calculations also showed that XP isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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

At Q1’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -21% from the previous quarter. On the other hand, there were a total of 13 hedge funds with a bullish position in XP a year ago. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

Among these funds, Alkeon Capital Management held the most valuable stake in XP Inc. (NASDAQ:XP), which was worth $161.6 million at the end of the fourth quarter. On the second spot was Maverick Capital which amassed $128.6 million worth of shares. ThornTree Capital Partners, Adage Capital Management, and Cartica Management 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 0 allocated the biggest weight to XP Inc. (NASDAQ:XP), around 7.55% of its 13F portfolio. 0 is also relatively very bullish on the stock, setting aside 4.51 percent of its 13F equity portfolio to XP.

Seeing as XP Inc. (NASDAQ:XP) has witnessed falling interest from hedge fund managers, we can see that there exists a select few hedge funds that slashed their full holdings by the end of the first quarter. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the largest stake of the 750 funds monitored by Insider Monkey, totaling close to $20.1 million in stock. Frank Fu’s fund, CaaS Capital, also cut its stock, about $5 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 6 funds by the end of the first quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as XP Inc. (NASDAQ:XP) but similarly valued. These stocks are HubSpot Inc (NYSE:HUBS), Fox Corporation (NASDAQ:FOX), Fox Corporation (NASDAQ:FOXA), W.W. Grainger, Inc. (NYSE:GWW), Enphase Energy Inc (NASDAQ:ENPH), Martin Marietta Materials, Inc. (NYSE:MLM), and West Pharmaceutical Services Inc. (NYSE:WST). All of these stocks’ market caps are similar to XP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HUBS 46 1738961 -6
FOX 25 774862 8
FOXA 38 865348 -1
GWW 30 351308 0
ENPH 49 803938 1
MLM 41 1951007 0
WST 26 419487 -8
Average 36.4 986416 -0.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 36.4 hedge funds with bullish positions and the average amount invested in these stocks was $986 million. That figure was $480 million in XP’s case. Enphase Energy Inc (NASDAQ:ENPH) is the most popular stock in this table. On the other hand Fox Corporation (NASDAQ:FOX) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks XP Inc. (NASDAQ:XP) is even less popular than FOX. Our overall hedge fund sentiment score for XP is 22.8. 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 23.8% in 2021 through July 16th but managed to beat the market by 7.7 percentage points. A small number of hedge funds were also right about betting on XP, though not to the same extent, as the stock returned 10.9% since the end of March (through July 16th) and outperformed the market as well.

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