Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Freedom Holding Corp. (NASDAQ:FRHC) based on that data.
Hedge fund interest in Freedom Holding Corp. (NASDAQ:FRHC) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare FRHC to other stocks including Endo International plc (NASDAQ:ENDP), OneSmart International Education Group Limited (NYSE:ONE), and Cadence Bancorporation (NYSE:CADE) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 44 percentage points since March 2017 (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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Wall Street Bull
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to go over the key hedge fund action regarding Freedom Holding Corp. (NASDAQ:FRHC).
How are hedge funds trading Freedom Holding Corp. (NASDAQ:FRHC)?
At Q1’s end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in FRHC a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Freedom Holding Corp. (NASDAQ:FRHC) was held by Arrowstreet Capital, which reported holding $6.2 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $2.3 million position. The only other hedge fund that is bullish on the company was ExodusPoint Capital.
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 go over hedge fund activity in other stocks similar to Freedom Holding Corp. (NASDAQ:FRHC). These stocks are Endo International plc (NASDAQ:ENDP), OneSmart International Education Group Limited (NYSE:ONE), Cadence Bancorporation (NYSE:CADE), and Rite Aid Corporation (NYSE:RAD). This group of stocks’ market valuations are similar to FRHC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ENDP | 22 | 213815 | 5 |
| ONE | 7 | 64491 | -1 |
| CADE | 29 | 66003 | 7 |
| RAD | 16 | 45558 | 6 |
| Average | 18.5 | 97467 | 4.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $97 million. That figure was $9 million in FRHC’s case. Cadence Bancorporation (NYSE:CADE) is the most popular stock in this table. On the other hand OneSmart International Education Group Limited (NYSE:ONE) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Freedom Holding Corp. (NASDAQ:FRHC) is even less popular than ONE. 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 7.9% in 2020 through May 22nd but managed to beat the market by 15.6 percentage points. A small number of hedge funds were also right about betting on FRHC, though not to the same extent, as the stock returned 16.6% during the second quarter (through May 22nd) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.