A market surge in the first quarter, spurred by easing global macroeconomic concerns and Powell’s pivot ended up having a positive impact on the markets and many hedge funds as a result. The stocks of smaller companies which were especially hard hit during the fourth quarter slightly outperformed the market during the first quarter. Unfortunately, Trump is unpredictable and volatility returned in the second quarter and smaller-cap stocks went back to selling off. We finished compiling the latest 13F filings to get an idea about what hedge funds are thinking about the overall market as well as individual stocks. In this article we will study the hedge fund sentiment to see how those concerns affected their ownership of The Meet Group, Inc. (NASDAQ:MEET) during the quarter.
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’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a peek at the recent hedge fund action encompassing The Meet Group, Inc. (NASDAQ:MEET).
Hedge fund activity in The Meet Group, Inc. (NASDAQ:MEET)
At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from one quarter earlier. On the other hand, there were a total of 9 hedge funds with a bullish position in MEET 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.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Christian Leone’s Luxor Capital Group has the biggest position in The Meet Group, Inc. (NASDAQ:MEET), worth close to $59.6 million, amounting to 2% of its total 13F portfolio. On Luxor Capital Group’s heels is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $6.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish comprise Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and Israel Englander’s Millennium Management.
As industrywide interest jumped, key money managers were breaking ground themselves. Element Capital Management, managed by Jeffrey Talpins, initiated the largest position in The Meet Group, Inc. (NASDAQ:MEET). Element Capital Management had $0.2 million invested in the company at the end of the quarter. Ronald Hua’s Qtron Investments also made a $0.2 million investment in the stock during the quarter. The other funds with brand new MEET positions are Mike Vranos’s Ellington, Jim Simons’s Renaissance Technologies, and Bruce Kovner’s Caxton Associates LP.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as The Meet Group, Inc. (NASDAQ:MEET) but similarly valued. We will take a look at BioDelivery Sciences International, Inc. (NASDAQ:BDSI), The Lovesac Company (NASDAQ:LOVE), Nam Tai Property Inc (NYSE:NTP), and IES Holdings, Inc. (NASDAQ:IESC). This group of stocks’ market valuations resemble MEET’s market valuation.
|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 9 hedge funds with bullish positions and the average amount invested in these stocks was $109 million. That figure was $76 million in MEET’s case. BioDelivery Sciences International, Inc. (NASDAQ:BDSI) is the most popular stock in this table. On the other hand Nam Tai Property Inc (NYSE:NTP) is the least popular one with only 5 bullish hedge fund positions. The Meet Group, Inc. (NASDAQ:MEET) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately MEET wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on MEET were disappointed as the stock returned -27.4% during the same period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.