Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Airbnb, Inc. (NASDAQ:ABNB).
Is Airbnb (ABNB) stock a buy or sell? The smart money was taking an optimistic view. The number of long hedge fund positions inched up by 68 in recent months. Airbnb, Inc. (NASDAQ:ABNB) was in 68 hedge funds’ portfolios at the end of December. Our calculations also showed that ABNB isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell 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. 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 homepage (or at the end of this article). Now we’re going to take a look at the fresh hedge fund action encompassing Airbnb, Inc. (NASDAQ:ABNB).
Do Hedge Funds Think ABNB Is A Good Stock To Buy Now?
At Q4’s end, a total of 68 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 68 from the previous quarter. The graph below displays the number of hedge funds with bullish position in ABNB over the last 22 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Airbnb, Inc. (NASDAQ:ABNB) was held by Silver Lake Partners, which reported holding $375.7 million worth of stock at the end of December. It was followed by SCGE Management with a $246.8 million position. Other investors bullish on the company included Glade Brook Capital Partners, Tiger Global Management LLC, and Polar Capital. In terms of the portfolio weights assigned to each position Glade Brook Capital Partners allocated the biggest weight to Airbnb, Inc. (NASDAQ:ABNB), around 100% of its 13F portfolio. Pinz Capital is also relatively very bullish on the stock, setting aside 4.06 percent of its 13F equity portfolio to ABNB.
As one would reasonably expect, key hedge funds were leading the bulls’ herd. Silver Lake Partners, managed by Jim Davidson, Dave Roux and Glenn Hutchins, initiated the largest position in Airbnb, Inc. (NASDAQ:ABNB). Silver Lake Partners had $375.7 million invested in the company at the end of the quarter. Christopher Lyle’s SCGE Management also made a $246.8 million investment in the stock during the quarter. The other funds with brand new ABNB positions are Paul Hudson’s Glade Brook Capital Partners, Chase Coleman’s Tiger Global Management LLC, and Brian Ashford-Russell and Tim Woolley’s Polar Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Airbnb, Inc. (NASDAQ:ABNB) but similarly valued. We will take a look at British American Tobacco plc (NYSE:BTI), Vale SA (NYSE:VALE), Deere & Company (NYSE:DE), Micron Technology, Inc. (NASDAQ:MU), Mondelez International Inc (NASDAQ:MDLZ), Mercadolibre Inc (NASDAQ:MELI), and The TJX Companies, Inc. (NYSE:TJX). This group of stocks’ market values resemble ABNB’s market value.
|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 56.6 hedge funds with bullish positions and the average amount invested in these stocks was $3912 million. That figure was $1611 million in ABNB’s case. Micron Technology, Inc. (NASDAQ:MU) is the most popular stock in this table. On the other hand British American Tobacco plc (NYSE:BTI) is the least popular one with only 10 bullish hedge fund positions. Airbnb, Inc. (NASDAQ:ABNB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ABNB is 61.6. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on ABNB as the stock returned 32.4% since the end of Q4 (through 3/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.