Here is What Hedge Funds Think About Ferrari N.V. (RACE)

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Ferrari N.V. (NYSE:RACE), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Ferrari N.V. (NYSE:RACE) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 27 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that RACE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare RACE to other stocks including Itau Unibanco Holding SA (NYSE:ITUB), Takeda Pharmaceutical Company Limited (NYSE:TAK), and Prudential Public Limited Company (NYSE:PUK) to get a better sense of its popularity.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let’s take a glance at the recent hedge fund action encompassing Ferrari N.V. (NYSE:RACE).

Gabriel Plotkin Melvin Capital Management

Gabriel Plotkin of Melvin Capital Management

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

At the end of the third quarter, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 31 hedge funds with a bullish position in RACE 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, Darsana Capital Partners was the largest shareholder of Ferrari N.V. (NYSE:RACE), with a stake worth $313.7 million reported as of the end of September. Trailing Darsana Capital Partners was Melvin Capital Management, which amassed a stake valued at $303.2 million. Ako Capital, Palestra Capital Management, and Melvin Capital 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 Lansing Management allocated the biggest weight to Ferrari N.V. (NYSE:RACE), around 15.7% of its 13F portfolio. Darsana Capital Partners is also relatively very bullish on the stock, dishing out 10.33 percent of its 13F equity portfolio to RACE.

Since Ferrari N.V. (NYSE:RACE) has faced falling interest from hedge fund managers, it’s easy to see that there was a specific group of hedge funds that decided to sell off their entire stakes by the end of the third quarter. It’s worth mentioning that Alexander Mitchell’s Scopus Asset Management cut the largest stake of all the hedgies watched by Insider Monkey, totaling close to $115.9 million in stock. Renaissance Technologies, also dumped its stock, about $10.7 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks similar to Ferrari N.V. (NYSE:RACE). We will take a look at Itau Unibanco Holding SA (NYSE:ITUB), Takeda Pharmaceutical Company Limited (NYSE:TAK), Prudential Public Limited Company (NYSE:PUK), Chipotle Mexican Grill, Inc. (NYSE:CMG), KLA Corporation (NASDAQ:KLAC), DocuSign, Inc. (NASDAQ:DOCU), and MSCI Inc (NYSE:MSCI). This group of stocks’ market values are similar to RACE’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ITUB 16 379560 0
TAK 15 443627 -4
PUK 4 10147 0
CMG 39 3687748 4
KLAC 44 1844123 -1
DOCU 51 4238147 -7
MSCI 43 997992 6
Average 30.3 1657335 -0.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.3 hedge funds with bullish positions and the average amount invested in these stocks was $1657 million. That figure was $1178 million in RACE’s case. DocuSign, Inc. (NASDAQ:DOCU) is the most popular stock in this table. On the other hand Prudential Public Limited Company (NYSE:PUK) is the least popular one with only 4 bullish hedge fund positions. Ferrari N.V. (NYSE:RACE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RACE is 52. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. A small number of hedge funds were also right about betting on RACE as the stock returned 24.5% since the end of the third quarter (through 12/9) and outperformed the market by an even larger margin.

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