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Hedge Funds Aren’t Hunting HeadHunter Group PLC (HHR)

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded HeadHunter Group PLC (NASDAQ:HHR) based on those filings.

HeadHunter Group PLC (NASDAQ:HHR) was in 5 hedge funds’ portfolios at the end of March. HHR investors should pay attention to a decrease in support from the world’s most elite money managers lately. There were 6 hedge funds in our database with HHR holdings at the end of the previous quarter. Our calculations also showed that HHR 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.

In the eyes of most investors, hedge funds are assumed to be slow, outdated financial tools of years past. While there are greater than 8000 funds with their doors open today, We look at the elite of this club, about 850 funds. It is estimated that this group of investors have their hands on most of the smart money’s total capital, and by observing their top equity investments, Insider Monkey has revealed many investment strategies that have historically outpaced the broader indices. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

David E. Shaw of D.E. Shaw

David E. Shaw of D.E. Shaw

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a look at the new hedge fund action encompassing HeadHunter Group PLC (NASDAQ:HHR).

How are hedge funds trading HeadHunter Group PLC (NASDAQ:HHR)?

At Q1’s end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in HHR a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Cat Rock Capital was the largest shareholder of HeadHunter Group PLC (NASDAQ:HHR), with a stake worth $25.6 million reported as of the end of September. Trailing Cat Rock Capital was Old Well Partners, which amassed a stake valued at $4.2 million. Renaissance Technologies, D E Shaw, and Millennium 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 Old Well Partners allocated the biggest weight to HeadHunter Group PLC (NASDAQ:HHR), around 4.24% of its 13F portfolio. Cat Rock Capital is also relatively very bullish on the stock, designating 3.07 percent of its 13F equity portfolio to HHR.

Due to the fact that HeadHunter Group PLC (NASDAQ:HHR) has faced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few hedge funds that elected to cut their positions entirely in the first quarter. Interestingly, Matt Sirovich and Jeremy Mindich’s Scopia Capital sold off the biggest stake of all the hedgies monitored by Insider Monkey, totaling about $31.6 million in stock, and Hugh Sloane’s Sloane Robinson Investment Management was right behind this move, as the fund said goodbye to about $2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 1 funds in the first quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as HeadHunter Group PLC (NASDAQ:HHR) but similarly valued. These stocks are Sprout Social, Inc. (NASDAQ:SPT), The Macerich Company (NYSE:MAC), Kite Realty Group Trust (NYSE:KRG), and NMI Holdings Inc (NASDAQ:NMIH). This group of stocks’ market values match HHR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SPT 16 108149 -3
MAC 21 41257 -5
KRG 8 39474 -5
NMIH 23 90878 2
Average 17 69940 -2.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $70 million. That figure was $31 million in HHR’s case. NMI Holdings Inc (NASDAQ:NMIH) is the most popular stock in this table. On the other hand Kite Realty Group Trust (NYSE:KRG) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks HeadHunter Group PLC (NASDAQ:HHR) is even less popular than KRG. Hedge funds dodged a bullet by taking a bearish stance towards HHR. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but managed to beat the market by 13.2 percentage points. Unfortunately HHR wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); HHR investors were disappointed as the stock returned 16.9% during the second quarter (through the end of May) 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 most of these stocks already outperformed the market so far in 2020.

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