Take-Two Interactive Software, Inc. (TTWO) Fell Out Of Favor With Hedge Funds

In this article we will take a look at whether hedge funds think Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Is Take-Two Interactive Software, Inc. (NASDAQ:TTWO) a buy, sell, or hold? Prominent investors were becoming less hopeful. The number of bullish hedge fund bets retreated by 2 lately. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) was in 53 hedge funds’ portfolios at the end of September. The all time high for this statistic is 66. Our calculations also showed that TTWO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a look at the key hedge fund action regarding Take-Two Interactive Software, Inc. (NASDAQ:TTWO).

Do Hedge Funds Think TTWO Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 53 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TTWO over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Anand Parekh’s Alyeska Investment Group has the number one position in Take-Two Interactive Software, Inc. (NASDAQ:TTWO), worth close to $136.5 million, accounting for 1.7% of its total 13F portfolio. Coming in second is Citadel Investment Group, led by Ken Griffin, holding a $103 million call position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that are bullish comprise Gavin Baker’s Atreides Management, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Marlowe Partners allocated the biggest weight to Take-Two Interactive Software, Inc. (NASDAQ:TTWO), around 10.61% of its 13F portfolio. Tensile Capital is also relatively very bullish on the stock, designating 7 percent of its 13F equity portfolio to TTWO.

Due to the fact that Take-Two Interactive Software, Inc. (NASDAQ:TTWO) has faced a decline in interest from the smart money, it’s safe to say that there lies a certain “tier” of money managers who sold off their entire stakes in the third quarter. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the largest stake of the “upper crust” of funds watched by Insider Monkey, valued at an estimated $120.4 million in stock. Gabriel Plotkin’s fund, Melvin Capital Management, also sold off its stock, about $35.4 million worth. These transactions are interesting, as total hedge fund interest dropped by 2 funds in the third quarter.

Let’s check out hedge fund activity in other stocks similar to Take-Two Interactive Software, Inc. (NASDAQ:TTWO). We will take a look at NICE Ltd (NASDAQ:NICE), Companhia Paranaense de Energia – COPEL (NYSE:ELP), VICI Properties Inc. (NYSE:VICI), HEICO Corporation (NYSE:HEI), Amcor plc (NYSE:AMCR), Quest Diagnostics Incorporated (NYSE:DGX), and SS&C Technologies Holdings, Inc. (NASDAQ:SSNC). This group of stocks’ market caps are closest to TTWO’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.7 hedge funds with bullish positions and the average amount invested in these stocks was $982 million. That figure was $1197 million in TTWO’s case. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is the most popular stock in this table. On the other hand Companhia Paranaense de Energia – COPEL (NYSE:ELP) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is more popular among hedge funds. Our overall hedge fund sentiment score for TTWO is 77.1. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on TTWO as the stock returned 7.7% since the end of September (through 11/30) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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