In this article we will analyze whether JOYY Inc. (NASDAQ:YY) 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 YY a good stock to buy? JOYY Inc. (NASDAQ:YY) has seen an increase in activity from the world’s largest hedge funds of late. JOYY Inc. (NASDAQ:YY) was in 24 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 31. There were 20 hedge funds in our database with YY holdings at the end of March. Our calculations also showed that YY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the 21st century investor’s toolkit there are dozens of gauges market participants have at their disposal to appraise stocks. Two of the most under-the-radar gauges are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the top investment managers can trounce their index-focused peers by a solid margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
At Insider Monkey, we scour multiple sources to uncover 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 EV 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. Now let’s take a peek at the fresh hedge fund action surrounding JOYY Inc. (NASDAQ:YY).
Do Hedge Funds Think YY Is A Good Stock To Buy Now?
At second quarter’s end, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from one quarter earlier. On the other hand, there were a total of 28 hedge funds with a bullish position in YY a year ago. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
The largest stake in JOYY Inc. (NASDAQ:YY) was held by 0, which reported holding $100.3 million worth of stock at the end of June. It was followed by Southeastern Asset Management with a $44.7 million position. Other investors bullish on the company included Renaissance Technologies, York Capital Management, and Yiheng Capital. In terms of the portfolio weights assigned to each position Maso Capital allocated the biggest weight to JOYY Inc. (NASDAQ:YY), around 7.58% of its 13F portfolio. York Capital Management is also relatively very bullish on the stock, dishing out 4.26 percent of its 13F equity portfolio to YY.
As industrywide interest jumped, some big names were leading the bulls’ herd. Yiheng Capital, managed by Jonathan Guo, established the largest position in JOYY Inc. (NASDAQ:YY). Yiheng Capital had $30.6 million invested in the company at the end of the quarter. Manoj Jain and Sohit Khurana’s Maso Capital also initiated a $23.1 million position during the quarter. The following funds were also among the new YY investors: Ken Griffin’s Citadel Investment Group, Joseph Samuels’s Islet Management, and Noam Gottesman’s GLG Partners.
Let’s also examine hedge fund activity in other stocks similar to JOYY Inc. (NASDAQ:YY). These stocks are Hexcel Corporation (NYSE:HXL), Progyny, Inc. (NASDAQ:PGNY), Rapid7 Inc (NASDAQ:RPD), Leslie’s, Inc. (NASDAQ:LESL), Everbridge, Inc. (NASDAQ:EVBG), The Wendy’s Company (NASDAQ:WEN), and Altair Engineering Inc. (NASDAQ:ALTR). This group of stocks’ market caps are similar to YY’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 26.7 hedge funds with bullish positions and the average amount invested in these stocks was $559 million. That figure was $340 million in YY’s case. Progyny, Inc. (NASDAQ:PGNY) is the most popular stock in this table. On the other hand Rapid7 Inc (NASDAQ:RPD) is the least popular one with only 17 bullish hedge fund positions. JOYY Inc. (NASDAQ:YY) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for YY is 48.1. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately YY wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); YY investors were disappointed as the stock returned -15.7% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.