Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks aren’t doing great but many of the stocks that delivered strong returns since March are still going very strong and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment to Yandex NV (NASDAQ:YNDX) changed recently.
Is YNDX a good stock to buy? Hedge funds were becoming less confident. The number of bullish hedge fund bets went down by 11 recently. Yandex NV (NASDAQ:YNDX) was in 33 hedge funds’ portfolios at the end of September. The all time high for this statistic is 48. Our calculations also showed that YNDX 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, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis 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. Keeping this in mind we’re going to analyze the new hedge fund action regarding Yandex NV (NASDAQ:YNDX).
Do Hedge Funds Think YNDX Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in YNDX over the last 21 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
Among these funds, Fisher Asset Management held the most valuable stake in Yandex NV (NASDAQ:YNDX), which was worth $361.6 million at the end of the third quarter. On the second spot was Egerton Capital Limited which amassed $331.4 million worth of shares. GQG Partners, Arrowstreet Capital, and Jericho Capital Asset 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 Solel Partners allocated the biggest weight to Yandex NV (NASDAQ:YNDX), around 8.27% of its 13F portfolio. Prince Street Capital Management is also relatively very bullish on the stock, setting aside 6.73 percent of its 13F equity portfolio to YNDX.
Seeing as Yandex NV (NASDAQ:YNDX) has witnessed a decline in interest from the aggregate hedge fund industry, logic holds that there was a specific group of fund managers who sold off their full holdings heading into Q4. Interestingly, Anthony Bozza’s Lakewood Capital Management sold off the largest investment of the 750 funds tracked by Insider Monkey, valued at close to $51.5 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund sold off about $40.7 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 11 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Yandex NV (NASDAQ:YNDX) but similarly valued. These stocks are AMETEK, Inc. (NYSE:AME), Freeport-McMoRan Inc. (NYSE:FCX), Phillips 66 (NYSE:PSX), TELUS Corporation (NYSE:TU), Nutrien Ltd. (NYSE:NTR), Yum China Holdings, Inc. (NYSE:YUMC), and DTE Energy Company (NYSE:DTE). This group of stocks’ market values are closest to YNDX’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 32.3 hedge funds with bullish positions and the average amount invested in these stocks was $678 million. That figure was $1588 million in YNDX’s case. Freeport-McMoRan Inc. (NYSE:FCX) is the most popular stock in this table. On the other hand TELUS Corporation (NYSE:TU) is the least popular one with only 12 bullish hedge fund positions. Yandex NV (NASDAQ:YNDX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for YNDX is 38. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 33.3% in 2020 through December 18th and beat the market again by 16.4 percentage points. Unfortunately YNDX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on YNDX were disappointed as the stock returned 6.2% since the end of September (through 12/18) 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 many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.