Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of SINA Corp (NASDAQ:SINA).
Is SINA a good stock to buy now? SINA Corp (NASDAQ:SINA) was in 22 hedge funds’ portfolios at the end of September. The all time high for this statistic is 34. SINA investors should pay attention to an increase in enthusiasm from smart money recently. There were 16 hedge funds in our database with SINA holdings at the end of June. Our calculations also showed that SINA 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.
Matthew Halbower of Pentwater Capital
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. Keeping this in mind let’s review the new hedge fund action encompassing SINA Corp (NASDAQ:SINA).
Do Hedge Funds Think SINA Is A Good Stock To Buy Now?
At the end of September, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 38% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards SINA over the last 21 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
The largest stake in SINA Corp (NASDAQ:SINA) was held by International Value Advisers, which reported holding $29.3 million worth of stock at the end of September. It was followed by GLG Partners with a $29.2 million position. Other investors bullish on the company included Pentwater Capital Management, Citadel Investment Group, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Kingstown Capital Management allocated the biggest weight to SINA Corp (NASDAQ:SINA), around 7.87% of its 13F portfolio. Maso Capital is also relatively very bullish on the stock, earmarking 3.57 percent of its 13F equity portfolio to SINA.
As one would reasonably expect, some big names were leading the bulls’ herd. Pentwater Capital Management, managed by Matthew Halbower, established the biggest position in SINA Corp (NASDAQ:SINA). Pentwater Capital Management had $22.2 million invested in the company at the end of the quarter. Michael Blitzer’s Kingstown Capital Management also initiated a $12.8 million position during the quarter. The following funds were also among the new SINA investors: Michael Platt and William Reeves’s BlueCrest Capital Mgmt., Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Manoj Jain and Sohit Khurana’s Maso Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as SINA Corp (NASDAQ:SINA) but similarly valued. These stocks are Afya Limited (NASDAQ:AFYA), Progyny, Inc. (NASDAQ:PGNY), Chart Industries, Inc. (NASDAQ:GTLS), Seres Therapeutics Inc (NASDAQ:MCRB), StepStone Group Inc. (NASDAQ:STEP), Ping Identity Holding Corp. (NYSE:PING), and Vaxcyte, Inc. (NASDAQ:PCVX). This group of stocks’ market valuations are closest to SINA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AFYA | 6 | 52155 | 0 |
| PGNY | 20 | 116628 | 1 |
| GTLS | 20 | 223347 | -2 |
| MCRB | 12 | 190096 | 7 |
| STEP | 15 | 83624 | 15 |
| PING | 11 | 73051 | -4 |
| PCVX | 10 | 473971 | -2 |
| Average | 13.4 | 173267 | 2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.4 hedge funds with bullish positions and the average amount invested in these stocks was $173 million. That figure was $177 million in SINA’s case. Progyny, Inc. (NASDAQ:PGNY) is the most popular stock in this table. On the other hand Afya Limited (NASDAQ:AFYA) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks SINA Corp (NASDAQ:SINA) is more popular among hedge funds. Our overall hedge fund sentiment score for SINA is 79.4. 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 December 14th and still beat the market by 15.8 percentage points. Unfortunately SINA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SINA were disappointed as the stock returned 3.5% since the end of the third quarter (through 12/14) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
