In this article you are going to find out whether hedge funds think Irsa Inversiones y Rprsntcins SA (NYSE:IRS) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Irsa Inversiones y Rprsntcins SA (NYSE:IRS) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds’ portfolios at the end of the first quarter of 2020. At the end of this article we will also compare IRS to other stocks including Exagen Inc. (NASDAQ:XGN), Overstock.com, Inc. (NASDAQ:OSTK), and CASI Pharmaceuticals Inc (NASDAQ:CASI) to get a better sense of its popularity.
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In the eyes of most investors, hedge funds are assumed to be unimportant, outdated investment vehicles of the past. While there are over 8000 funds in operation today, Our researchers hone in on the top tier of this group, about 850 funds. Most estimates calculate that this group of people oversee bulk of the smart money’s total capital, and by tailing their finest picks, Insider Monkey has spotted a number of investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per annum 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 .
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. With all of this in mind let’s take a peek at the fresh hedge fund action encompassing Irsa Inversiones y Rprsntcins SA (NYSE:IRS).
What does smart money think about Irsa Inversiones y Rprsntcins SA (NYSE:IRS)?
At Q1’s end, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 8 hedge funds held shares or bullish call options in IRS a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Autonomy Capital held the most valuable stake in Irsa Inversiones y Rprsntcins SA (NYSE:IRS), which was worth $9.4 million at the end of the third quarter. On the second spot was 683 Capital Partners which amassed $3.2 million worth of shares. MFN Partners, Brigade Capital, and Citadel Investment Group 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 Autonomy Capital allocated the biggest weight to Irsa Inversiones y Rprsntcins SA (NYSE:IRS), around 5.74% of its 13F portfolio. 683 Capital Partners is also relatively very bullish on the stock, dishing out 0.37 percent of its 13F equity portfolio to IRS.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Renaissance Technologies. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was MFN Partners).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Irsa Inversiones y Rprsntcins SA (NYSE:IRS) but similarly valued. These stocks are Exagen Inc. (NASDAQ:XGN), Overstock.com, Inc. (NASDAQ:OSTK), CASI Pharmaceuticals Inc (NASDAQ:CASI), and LF Capital Acquistion Corp. (NASDAQ:LFAC). This group of stocks’ market valuations are closest to IRS’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 4.75 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $14 million in IRS’s case. LF Capital Acquistion Corp. (NASDAQ:LFAC) is the most popular stock in this table. On the other hand Exagen Inc. (NASDAQ:XGN) is the least popular one with only 1 bullish hedge fund positions. Irsa Inversiones y Rprsntcins SA (NYSE:IRS) is not the most popular stock in this group but hedge fund interest is still above average. 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 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. Unfortunately IRS wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on IRS were disappointed as the stock returned 9.5% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.