We at Insider Monkey have gone over 730 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of June 28th. In this article, we look at what those funds think of Huami Corporation (NYSE:HMI) based on that data.
Huami Corporation (NYSE:HMI) has seen an increase in support from the world’s most elite money managers in recent months. Our calculations also showed that HMI isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most market participants, hedge funds are seen as underperforming, outdated financial tools of years past. While there are more than 8000 funds trading today, Our researchers hone in on the upper echelon of this club, approximately 750 funds. These money managers shepherd bulk of the hedge fund industry’s total capital, and by following their best picks, Insider Monkey has identified numerous investment strategies that have historically defeated the broader indices. Insider Monkey’s flagship hedge fund strategy outpaced the S&P 500 index by around 5 percentage points per annum since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to go over the new hedge fund action surrounding Huami Corporation (NYSE:HMI).
What does smart money think about Huami Corporation (NYSE:HMI)?
At Q2’s end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in HMI over the last 16 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies has the largest position in Huami Corporation (NYSE:HMI), worth close to $5.6 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Paul Marshall and Ian Wace of Marshall Wace LLP, with a $2.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that hold long positions comprise Noam Gottesman’s GLG Partners, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.
As industrywide interest jumped, key money managers were leading the bulls’ herd. GLG Partners, managed by Noam Gottesman, created the biggest position in Huami Corporation (NYSE:HMI). GLG Partners had $1.5 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $0.5 million position during the quarter. The only other fund with a new position in the stock is Ken Griffin’s Citadel Investment Group.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Huami Corporation (NYSE:HMI) but similarly valued. We will take a look at Century Aluminum Company (NASDAQ:CENX), Translate Bio, Inc. (NASDAQ:TBIO), Cresud Sociedad Anonima Comercial, Inmobiliaria, Financiera y Agropecuaria (CRESY) (NASDAQ:CRESY), and Nicolet Bankshares Inc. (NASDAQ:NCBS). All of these stocks’ market caps match HMI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CENX | 14 | 34743 | 2 |
| TBIO | 10 | 156077 | 3 |
| CRESY | 7 | 22661 | 0 |
| NCBS | 4 | 5945 | 1 |
| Average | 8.75 | 54857 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $12 million in HMI’s case. Century Aluminum Company (NASDAQ:CENX) is the most popular stock in this table. On the other hand Nicolet Bankshares Inc. (NASDAQ:NCBS) is the least popular one with only 4 bullish hedge fund positions. Huami Corporation (NYSE:HMI) is not the least popular stock in this group but hedge fund interest is still below average. 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately HMI wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); HMI investors were disappointed as the stock returned 0% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.
