Is JD.Com (JD) Stock A Buy or Sell?

In this article we will analyze whether JD.Com Inc (NASDAQ:JD) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

Is JD stock a buy or sell? JD.Com Inc (NASDAQ:JD) has experienced an increase in support from the world’s most elite money managers recently. JD.Com Inc (NASDAQ:JD) was in 89 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 90. There were 85 hedge funds in our database with JD holdings at the end of September. Our calculations also showed that JD isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

To most shareholders, hedge funds are perceived as slow, old investment tools of yesteryear. While there are greater than 8000 funds in operation at the moment, Our experts choose to focus on the leaders of this group, approximately 850 funds. These money managers oversee the majority of the smart money’s total asset base, and by following their best equity investments, Insider Monkey has formulated various investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points a 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 11 short targets in our latest quarterly update .

Daniel Sundheim D1 Capital

Daniel Sundheim of D1 Capital Partners

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 view the latest hedge fund action surrounding JD.Com Inc (NASDAQ:JD).

Do Hedge Funds Think JD Is A Good Stock To Buy Now?

Heading into the first quarter of 2021, a total of 89 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards JD over the last 22 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).

More specifically, Tiger Global Management LLC was the largest shareholder of JD.Com Inc (NASDAQ:JD), with a stake worth $4540.1 million reported as of the end of December. Trailing Tiger Global Management LLC was D1 Capital Partners, which amassed a stake valued at $1804.6 million. Hillhouse Capital Management, GQG Partners, and Fisher Asset Management 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 Infini Capital allocated the biggest weight to JD.Com Inc (NASDAQ:JD), around 50.86% of its 13F portfolio. Kontiki Capital is also relatively very bullish on the stock, earmarking 35.16 percent of its 13F equity portfolio to JD.

With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Tairen Capital, managed by Larry Chen and Terry Zhang, initiated the biggest position in JD.Com Inc (NASDAQ:JD). Tairen Capital had $178.8 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also made a $72.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Tony Chin’s Infini Capital, Chris Rokos’s Rokos Capital Management, and Jonathan Soros’s JS Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as JD.Com Inc (NASDAQ:JD) but similarly valued. We will take a look at Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), KE Holdings Inc (NYSE:BEKE), Snowflake Inc (NYSE:SNOW), Booking Holdings Inc. (NASDAQ:BKNG), Crown Castle International Corp. (REIT) (NYSE:CCI), Deere & Company (NYSE:DE), and The Goldman Sachs Group, Inc. (NYSE:GS). This group of stocks’ market caps resemble JD’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
VRTX 53 3108859 -2
BEKE 30 2038963 2
SNOW 54 7723382 -5
BKNG 108 8247434 -5
CCI 40 2071704 -2
DE 54 1804359 12
GS 76 4607743 6
Average 59.3 4228921 0.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 59.3 hedge funds with bullish positions and the average amount invested in these stocks was $4229 million. That figure was $14396 million in JD’s case. Booking Holdings Inc. (NASDAQ:BKNG) is the most popular stock in this table. On the other hand KE Holdings Inc (NYSE:BEKE) is the least popular one with only 30 bullish hedge fund positions. JD.Com Inc (NASDAQ:JD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for JD is 76.5. 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. 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 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 7% in 2021 through March 12th and beat the market again by 1.6 percentage points. Unfortunately JD wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on JD were disappointed as the stock returned -4.4% since the end of December (through 3/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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