The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. In this article we are going to take a look at smart money sentiment towards Match Group, Inc. (NASDAQ:MTCH).
Is MTCH a good stock to buy now? Match Group, Inc. (NASDAQ:MTCH) has seen an increase in hedge fund sentiment in recent months. Match Group, Inc. (NASDAQ:MTCH) was in 61 hedge funds’ portfolios at the end of September. The all time high for this statistics is 44. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that MTCH 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 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 13% through November 17th. 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, we believe electric vehicles and energy storage are set to become giant markets. Tesla’s stock price skyrocketed, yet lithium prices are still below their 2019 highs. So, we are checking out this lithium stock right now. We go through lists like the 15 best blue chip stocks to buy 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 let’s take a gander at the latest hedge fund action surrounding Match Group, Inc. (NASDAQ:MTCH).
How have hedgies been trading Match Group, Inc. (NASDAQ:MTCH)?
At the end of the third quarter, a total of 61 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 56% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in MTCH over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Lone Pine Capital held the most valuable stake in Match Group, Inc. (NASDAQ:MTCH), which was worth $866.8 million at the end of the third quarter. On the second spot was Egerton Capital Limited which amassed $375.4 million worth of shares. Citadel Investment Group, Tybourne Capital Management, and Steadfast Capital 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 Portsea Asset Management allocated the biggest weight to Match Group, Inc. (NASDAQ:MTCH), around 33.24% of its 13F portfolio. ShawSpring Partners is also relatively very bullish on the stock, designating 17.52 percent of its 13F equity portfolio to MTCH.
As industrywide interest jumped, some big names were leading the bulls’ herd. Scopus Asset Management, managed by Alexander Mitchell, established the biggest position in Match Group, Inc. (NASDAQ:MTCH). Scopus Asset Management had $95.4 million invested in the company at the end of the quarter. Dennis Hong’s ShawSpring Partners also initiated a $86.2 million position during the quarter. The other funds with brand new MTCH positions are Josh Resnick’s Jericho Capital Asset Management, Barry Dargan’s Intermede Investment Partners, and James Crichton’s Hitchwood Capital Management.
Let’s go over hedge fund activity in other stocks similar to Match Group, Inc. (NASDAQ:MTCH). These stocks are Paychex, Inc. (NASDAQ:PAYX), Peloton Interactive, Inc. (NASDAQ:PTON), Eversource Energy (NYSE:ES), CRH PLC (NYSE:CRH), Zimmer Biomet Holdings Inc (NYSE:ZBH), Chunghwa Telecom Co., Ltd (NYSE:CHT), and ANSYS, Inc. (NASDAQ:ANSS). This group of stocks’ market valuations resemble MTCH’s market valuation.
|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 30.4 hedge funds with bullish positions and the average amount invested in these stocks was $1047 million. That figure was $2847 million in MTCH’s case. Peloton Interactive, Inc. (NASDAQ:PTON) is the most popular stock in this table. On the other hand Chunghwa Telecom Co., Ltd (NYSE:CHT) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Match Group, Inc. (NASDAQ:MTCH) is more popular among hedge funds. Our overall hedge fund sentiment score for MTCH is 90. 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 returned 31.6% in 2020 through December 2nd but still managed to beat the market by 16 percentage points. Hedge funds were also right about betting on MTCH as the stock returned 25.6% since the end of September (through 12/2) 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.