After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards SelectQuote, Inc. (NYSE:SLQT).
Is SLQT a good stock to buy now? SelectQuote, Inc. (NYSE:SLQT) has experienced a decrease in enthusiasm from smart money recently. SelectQuote, Inc. (NYSE:SLQT) was in 14 hedge funds’ portfolios at the end of September. The all time high for this statistic is 29. Our calculations also showed that SLQT 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.
If you’d ask most traders, hedge funds are assumed to be slow, old financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open today, Our researchers hone in on the top tier of this club, approximately 850 funds. It is estimated that this group of investors handle bulk of all hedge funds’ total capital, and by observing their first-class investments, Insider Monkey has figured out a number of investment strategies that have historically outpaced the broader indices. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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 take a look at the latest hedge fund action regarding SelectQuote, Inc. (NYSE:SLQT).
Do Hedge Funds Think SLQT Is A Good Stock To Buy Now?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -52% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SLQT over the last 21 quarters. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
The largest stake in SelectQuote, Inc. (NYSE:SLQT) was held by Soros Fund Management, which reported holding $112.5 million worth of stock at the end of September. It was followed by Redmile Group with a $27.4 million position. Other investors bullish on the company included Arrowstreet Capital, Deerfield Management, and Point72 Asset Management. In terms of the portfolio weights assigned to each position Soros Fund Management allocated the biggest weight to SelectQuote, Inc. (NYSE:SLQT), around 2.75% of its 13F portfolio. Game Creek Capital is also relatively very bullish on the stock, designating 1.82 percent of its 13F equity portfolio to SLQT.
Due to the fact that SelectQuote, Inc. (NYSE:SLQT) has faced a decline in interest from the entirety of the hedge funds we track, logic holds that there exists a select few money managers who sold off their positions entirely heading into Q4. Interestingly, Samuel Isaly’s OrbiMed Advisors said goodbye to the biggest stake of the “upper crust” of funds followed by Insider Monkey, totaling about $31.8 million in stock. Aaron Cowen’s fund, Suvretta Capital Management, also sold off its stock, about $13 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 15 funds heading into Q4.
Let’s check out hedge fund activity in other stocks similar to SelectQuote, Inc. (NYSE:SLQT). We will take a look at Schrodinger, Inc. (NASDAQ:SDGR), Reata Pharmaceuticals, Inc. (NASDAQ:RETA), Targa Resources Corp (NYSE:TRGP), AerCap Holdings N.V. (NYSE:AER), Insmed Incorporated (NASDAQ:INSM), Equity Commonwealth (NYSE:EQC), and Gates Industrial Corporation plc (NYSE:GTES). This group of stocks’ market values are closest to SLQT’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 26 hedge funds with bullish positions and the average amount invested in these stocks was $352 million. That figure was $218 million in SLQT’s case. AerCap Holdings N.V. (NYSE:AER) is the most popular stock in this table. On the other hand Gates Industrial Corporation plc (NYSE:GTES) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks SelectQuote, Inc. (NYSE:SLQT) is even less popular than GTES. Our overall hedge fund sentiment score for SLQT is 4.5. 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. Hedge funds clearly dropped the ball on SLQT as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on SLQT as the stock returned 16.4% since Q3 (through December 8th) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.