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 823 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 June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Redfin Corporation (NASDAQ:RDFN) and determine whether the smart money was really smart about this stock.
Redfin Corporation (NASDAQ:RDFN) investors should pay attention to an increase in hedge fund interest lately. Redfin Corporation (NASDAQ:RDFN) was in 26 hedge funds’ portfolios at the end of June. The all time high for this statistics is 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 20 hedge funds in our database with RDFN holdings at the end of March. Our calculations also showed that RDFN isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
At the moment there are plenty of gauges shareholders put to use to assess stocks. A pair of the most under-the-radar gauges are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the top investment managers can outclass the market by a significant margin (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Now let’s view the recent hedge fund action regarding Redfin Corporation (NASDAQ:RDFN).
What have hedge funds been doing with Redfin Corporation (NASDAQ:RDFN)?
At second quarter’s end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 30% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in RDFN over the last 20 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Atreides Management was the largest shareholder of Redfin Corporation (NASDAQ:RDFN), with a stake worth $44 million reported as of the end of September. Trailing Atreides Management was Renaissance Technologies, which amassed a stake valued at $35.2 million. Citadel Investment Group, Citadel Investment Group, and Ancient Art (Teton Capital) 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 Atreides Management allocated the biggest weight to Redfin Corporation (NASDAQ:RDFN), around 6.21% of its 13F portfolio. Guardian Point Capital is also relatively very bullish on the stock, designating 3.81 percent of its 13F equity portfolio to RDFN.
As aggregate interest increased, some big names have jumped into Redfin Corporation (NASDAQ:RDFN) headfirst. Land & Buildings Investment Management, managed by Jonathan Litt, created the most valuable position in Redfin Corporation (NASDAQ:RDFN). Land & Buildings Investment Management had $8.7 million invested in the company at the end of the quarter. Paul Reeder and Edward Shapiro’s PAR Capital Management also initiated a $5.4 million position during the quarter. The following funds were also among the new RDFN investors: Zachary Miller’s Parian Global Management, Noam Gottesman’s GLG Partners, and Parvinder Thiara’s Athanor Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Redfin Corporation (NASDAQ:RDFN) but similarly valued. These stocks are New Relic Inc (NYSE:NEWR), Nektar Therapeutics (NASDAQ:NKTR), First Citizens BancShares Inc. (NASDAQ:FCNCA), Wingstop Inc (NASDAQ:WING), Neogen Corporation (NASDAQ:NEOG), First Financial Bankshares Inc (NASDAQ:FFIN), and TriNet Group Inc (NYSE:TNET). This group of stocks’ market caps match RDFN’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $329 million. That figure was $203 million in RDFN’s case. New Relic Inc (NYSE:NEWR) is the most popular stock in this table. On the other hand First Citizens BancShares Inc. (NASDAQ:FCNCA) is the least popular one with only 15 bullish hedge fund positions. Redfin Corporation (NASDAQ:RDFN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RDFN is 67.5. 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 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 gained 21.3% in 2020 through September 25th and still beat the market by 17.7 percentage points. Hedge funds were also right about betting on RDFN as the stock returned 13.4% during Q3 (through September 25th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.