Is 111, Inc. (YI) A Good Stock To Buy Now?

At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards 111, Inc. (NASDAQ:YI).

Hedge fund interest in 111, Inc. (NASDAQ:YI) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that YI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as AMC Entertainment Holdings Inc (NYSE:AMC), Banco BBVA Argentina S.A. (NYSE:BBAR), and Clovis Oncology Inc (NASDAQ:CLVS) to gather more data points.

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the eyes of most traders, hedge funds are perceived as underperforming, old financial vehicles of years past. While there are over 8000 funds with their doors open today, Our experts hone in on the crème de la crème of this group, around 850 funds. These hedge fund managers handle the lion’s share of the hedge fund industry’s total asset base, and by monitoring their finest stock picks, Insider Monkey has determined several investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Gavin Saitowitz of Prelude Capital

Gavin Saitowitz of Prelude Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. 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. With all of this in mind let’s take a look at the latest hedge fund action encompassing 111, Inc. (NASDAQ:YI).

Hedge fund activity in 111, Inc. (NASDAQ:YI)

At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards YI over the last 21 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Totem Point Management, managed by Neal Nathani and Darren Dinneen, holds the number one position in 111, Inc. (NASDAQ:YI). Totem Point Management has a $5.9 million position in the stock, comprising 2% of its 13F portfolio. Coming in second is Renaissance Technologies, which holds a $1.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish comprise Israel Englander’s Millennium Management, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital and . In terms of the portfolio weights assigned to each position Totem Point Management allocated the biggest weight to 111, Inc. (NASDAQ:YI), around 1.97% of its 13F portfolio. Springbok Capital is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to YI.

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s also examine hedge fund activity in other stocks similar to 111, Inc. (NASDAQ:YI). These stocks are AMC Entertainment Holdings Inc (NYSE:AMC), Banco BBVA Argentina S.A. (NYSE:BBAR), Clovis Oncology Inc (NASDAQ:CLVS), Nautilus, Inc. (NYSE:NLS), Loma Negra Compania Industrial Argentina Sociedad Anonima (NYSE:LOMA), Front Yard Residential Corporation (NYSE:RESI), and Flexion Therapeutics Inc (NASDAQ:FLXN). This group of stocks’ market caps resemble YI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AMC 12 7804 4
BBAR 3 2782 -5
CLVS 15 69500 -3
NLS 17 86762 5
LOMA 9 37079 -2
RESI 20 56519 -5
FLXN 17 121644 2
Average 13.3 54584 -0.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.3 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $8 million in YI’s case. Front Yard Residential Corporation (NYSE:RESI) is the most popular stock in this table. On the other hand Banco BBVA Argentina S.A. (NYSE:BBAR) is the least popular one with only 3 bullish hedge fund positions. 111, Inc. (NASDAQ:YI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for YI is 37.9. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on YI as the stock returned 15.2% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.

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