Is Phoenix New Media Ltd (FENG) Going to Burn These Hedge Funds?

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 Phoenix New Media Ltd (NYSE:FENG) based on that data.

Is Phoenix New Media Ltd (NYSE:FENG) ready to rally soon? The smart money is becoming more confident. The number of long hedge fund bets went up by 1 lately. Our calculations also showed that FENG 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.

In the eyes of most shareholders, hedge funds are seen as slow, outdated financial tools of the past. While there are more than 8000 funds with their doors open today, We hone in on the aristocrats of this group, approximately 850 funds. These money managers watch over bulk of the hedge fund industry’s total asset base, and by monitoring their highest performing investments, Insider Monkey has revealed a number of investment strategies that have historically outstripped the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

John Overdeck of Two Sigma

John Overdeck of Two Sigma Advisors

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 we’re going to review the key hedge fund action regarding Phoenix New Media Ltd (NYSE:FENG).

Hedge fund activity in Phoenix New Media Ltd (NYSE:FENG)

At Q1’s end, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in FENG over the last 18 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

The largest stake in Phoenix New Media Ltd (NYSE:FENG) was held by International Value Advisers, which reported holding $6.5 million worth of stock at the end of September. It was followed by Sylebra Capital Management with a $1.1 million position. Other investors bullish on the company included Renaissance Technologies, Polar Capital, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position International Value Advisers allocated the biggest weight to Phoenix New Media Ltd (NYSE:FENG), around 0.41% of its 13F portfolio. Sylebra Capital Management is also relatively very bullish on the stock, dishing out 0.05 percent of its 13F equity portfolio to FENG.

As industrywide interest jumped, key hedge funds have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, initiated the largest position in Phoenix New Media Ltd (NYSE:FENG). Citadel Investment Group had $0 million invested in the company at the end of the quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Phoenix New Media Ltd (NYSE:FENG) but similarly valued. We will take a look at Laredo Petroleum Inc (NYSE:LPI), On Deck Capital Inc (NYSE:ONDK), Auryn Resources Inc. (NYSE:AUG), and Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE). This group of stocks’ market caps match FENG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LPI 7 5369 -6
ONDK 15 34014 -2
AUG 1 85 -2
ZYNE 7 3948 1
Average 7.5 10854 -2.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $9 million in FENG’s case. On Deck Capital Inc (NYSE:ONDK) is the most popular stock in this table. On the other hand Auryn Resources Inc. (NYSE:AUG) is the least popular one with only 1 bullish hedge fund positions. Phoenix New Media Ltd (NYSE:FENG) is not the least popular stock in this group but hedge fund interest is still below average. 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 gained 13.9% in 2020 through June 10th but beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on FENG, though not to the same extent, as the stock returned 25.8% during the second quarter and outperformed the market.

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