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 at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of EverQuote, Inc. (NASDAQ:EVER).
Is EverQuote, Inc. (NASDAQ:EVER) a healthy stock for your portfolio? Money managers are buying. The number of long hedge fund positions inched up by 4 recently. Our calculations also showed that EVER 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). EVER was in 23 hedge funds’ portfolios at the end of the first quarter of 2020. There were 19 hedge funds in our database with EVER positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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 trades like this one. 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. Now we’re going to review the new hedge fund action surrounding EverQuote, Inc. (NASDAQ:EVER).
How are hedge funds trading EverQuote, Inc. (NASDAQ:EVER)?
At the end of the first quarter, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 21% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards EVER over the last 18 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of EverQuote, Inc. (NASDAQ:EVER), with a stake worth $26 million reported as of the end of September. Trailing Renaissance Technologies was G2 Investment Partners Management, which amassed a stake valued at $19.1 million. Shannon River Fund Management, Driehaus Capital, and D E Shaw 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 G2 Investment Partners Management allocated the biggest weight to EverQuote, Inc. (NASDAQ:EVER), around 6.31% of its 13F portfolio. Shannon River Fund Management is also relatively very bullish on the stock, earmarking 3.19 percent of its 13F equity portfolio to EVER.
As industrywide interest jumped, key money managers were breaking ground themselves. Shannon River Fund Management, managed by Spencer M. Waxman, established the most outsized position in EverQuote, Inc. (NASDAQ:EVER). Shannon River Fund Management had $18.9 million invested in the company at the end of the quarter. Mark Coe’s Intrinsic Edge Capital also made a $2.6 million investment in the stock during the quarter. The other funds with brand new EVER positions are Greg Eisner’s Engineers Gate Manager, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Bruce Kovner’s Caxton Associates LP.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as EverQuote, Inc. (NASDAQ:EVER) but similarly valued. These stocks are Veritex Holdings Inc (NASDAQ:VBTX), INMODE LTD. (NASDAQ:INMD), Homology Medicines, Inc. (NASDAQ:FIXX), and MFA Financial, Inc. (NYSE:MFA). This group of stocks’ market values are closest to EVER’s market value.
|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 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $56 million. That figure was $111 million in EVER’s case. MFA Financial, Inc. (NYSE:MFA) is the most popular stock in this table. On the other hand Veritex Holdings Inc (NASDAQ:VBTX) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks EverQuote, Inc. (NASDAQ:EVER) is more popular among hedge funds. 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 returned 13.9% in 2020 through June 10th but still managed to beat the market by 14.2 percentage points. Hedge funds were also right about betting on EVER as the stock returned 120.7% so far in Q2 (through June 10th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.