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 HyreCar Inc. (NASDAQ:HYRE) based on that data.
Is HyreCar Inc. (NASDAQ:HYRE) an attractive investment now? The smart money is taking a bearish view. The number of bullish hedge fund positions dropped by 1 recently. Our calculations also showed that HYRE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
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 58 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.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a gander at the recent hedge fund action encompassing HyreCar Inc. (NASDAQ:HYRE).
What have hedge funds been doing with HyreCar Inc. (NASDAQ:HYRE)?
Heading into the second quarter of 2020, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from one quarter earlier. By comparison, 3 hedge funds held shares or bullish call options in HYRE 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, Lynrock Lake was the largest shareholder of HyreCar Inc. (NASDAQ:HYRE), with a stake worth $2.1 million reported as of the end of September. Trailing Lynrock Lake was G2 Investment Partners Management, which amassed a stake valued at $1.9 million. Portolan Capital Management, Invenomic Capital Management, and Citadel Investment Group 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 G2 Investment Partners Management allocated the biggest weight to HyreCar Inc. (NASDAQ:HYRE), around 0.63% of its 13F portfolio. Invenomic Capital Management is also relatively very bullish on the stock, dishing out 0.23 percent of its 13F equity portfolio to HYRE.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified HYRE as a viable investment and initiated a position in the stock.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as HyreCar Inc. (NASDAQ:HYRE) but similarly valued. These stocks are Stein Mart, Inc. (NASDAQ:SMRT), Altisource Asset Management Corp (NYSE:AAMC), Aerpio Pharmaceuticals, Inc. (NASDAQ:ARPO), and Microvision, Inc. (NASDAQ:MVIS). This group of stocks’ market values are closest to HYRE’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 2.25 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $5 million in HYRE’s case. Stein Mart, Inc. (NASDAQ:SMRT) is the most popular stock in this table. On the other hand Altisource Asset Management Corp (NYSE:AAMC) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks HyreCar Inc. (NASDAQ:HYRE) is more popular among hedge funds. 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 returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on HYRE as the stock returned 61% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.