Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards MOGU Inc. (NYSE:MOGU) to find out whether there were any major changes in hedge funds’ views.
Is MOGU Inc. (NYSE:MOGU) a good stock to buy now? The smart money was becoming hopeful. The number of long hedge fund positions moved up by 4 lately. MOGU Inc. (NYSE:MOGU) was in 6 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that MOGU isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 2 hedge funds in our database with MOGU positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are dozens of gauges stock market investors use to assess publicly traded companies. Two of the most underrated gauges are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the top money managers can outclass the market by a superb amount (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind we’re going to take a glance at the new hedge fund action encompassing MOGU Inc. (NYSE:MOGU).
What does smart money think about MOGU Inc. (NYSE:MOGU)?
At third quarter’s end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 200% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards MOGU over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Hillhouse Capital Management, managed by Lei Zhang, holds the most valuable position in MOGU Inc. (NYSE:MOGU). Hillhouse Capital Management has a $24.6 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Keywise Capital Management, led by Fang Zheng, holding a $2.9 million position; 0.7% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish comprise Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital), Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Renaissance Technologies. In terms of the portfolio weights assigned to each position Keywise Capital Management allocated the biggest weight to MOGU Inc. (NYSE:MOGU), around 0.71% of its 13F portfolio. Hillhouse Capital Management is also relatively very bullish on the stock, dishing out 0.19 percent of its 13F equity portfolio to MOGU.
As aggregate interest increased, some big names have been driving this bullishness. Keywise Capital Management, managed by Fang Zheng, initiated the largest position in MOGU Inc. (NYSE:MOGU). Keywise Capital Management had $2.9 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital) also made a $1.6 million investment in the stock during the quarter. The following funds were also among the new MOGU investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Israel Englander’s Millennium Management.
Let’s also examine hedge fund activity in other stocks similar to MOGU Inc. (NYSE:MOGU). These stocks are Limoneira Company (NASDAQ:LMNR), Denison Mines Corp (NYSE:DNN), Whitestone REIT (NYSE:WSR), Liquidity Services, Inc. (NASDAQ:LQDT), Radiant Logistics, Inc. (NYSE:RLGT), Peoples Financial Services Corp. (NASDAQ:PFIS), and Berry Corporation (NASDAQ:BRY). This group of stocks’ market values resemble MOGU’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 8.4 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $30 million in MOGU’s case. Liquidity Services, Inc. (NASDAQ:LQDT) is the most popular stock in this table. On the other hand Peoples Financial Services Corp. (NASDAQ:PFIS) is the least popular one with only 1 bullish hedge fund positions. MOGU Inc. (NYSE:MOGU) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MOGU is 58.2. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on MOGU as the stock returned 16.6% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.