The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Lyft, Inc. (NASDAQ:LYFT) and determine whether the smart money was really smart about this stock.
Lyft, Inc. (NASDAQ:LYFT) has experienced a decrease in enthusiasm from smart money of late. Lyft, Inc. (NASDAQ:LYFT) was in 33 hedge funds’ portfolios at the end of September. The all time high for this statistic is 71. There were 43 hedge funds in our database with LYFT holdings at the end of June. Our calculations also showed that LYFT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Harold Levy of Iridian Asset Management
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 let’s take a look at the recent hedge fund action regarding Lyft, Inc. (NASDAQ:LYFT).
Do Hedge Funds Think LYFT Is A Good Stock To Buy Now?
At the end of September, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -23% from one quarter earlier. By comparison, 32 hedge funds held shares or bullish call options in LYFT a year ago. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
Among these funds, Citadel Investment Group held the most valuable stake in Lyft, Inc. (NASDAQ:LYFT), which was worth $254.6 million at the end of the third quarter. On the second spot was Alkeon Capital Management which amassed $253.3 million worth of shares. D E Shaw, Millennium Management, and Iridian 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 Cavalry Asset Management allocated the biggest weight to Lyft, Inc. (NASDAQ:LYFT), around 4.53% of its 13F portfolio. Anomaly Capital Management is also relatively very bullish on the stock, setting aside 4.46 percent of its 13F equity portfolio to LYFT.
Since Lyft, Inc. (NASDAQ:LYFT) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of funds that decided to sell off their full holdings heading into Q4. Interestingly, David Costen Haley’s HBK Investments sold off the biggest investment of all the hedgies watched by Insider Monkey, comprising about $119.4 million in stock, and Nicolai Tangen’s Ako Capital was right behind this move, as the fund cut about $118.1 million worth. These transactions are interesting, as total hedge fund interest fell by 10 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Lyft, Inc. (NASDAQ:LYFT) but similarly valued. We will take a look at Take-Two Interactive Software, Inc. (NASDAQ:TTWO), NICE Ltd (NASDAQ:NICE), Companhia Paranaense de Energia (NYSE:ELP), VICI Properties Inc. (NYSE:VICI), HEICO Corporation (NYSE:HEI), Amcor plc (NYSE:AMCR), and Quest Diagnostics Incorporated (NYSE:DGX). This group of stocks’ market values match LYFT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TTWO | 53 | 1196708 | -2 |
| NICE | 27 | 1119470 | 5 |
| ELP | 7 | 30561 | -6 |
| VICI | 47 | 1377694 | 10 |
| HEI | 35 | 719437 | -6 |
| AMCR | 19 | 214115 | 3 |
| DGX | 36 | 488311 | 5 |
| Average | 32 | 735185 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $735 million. That figure was $900 million in LYFT’s case. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is the most popular stock in this table. On the other hand Companhia Paranaense de Energia (NYSE:ELP) is the least popular one with only 7 bullish hedge fund positions. Lyft, Inc. (NASDAQ:LYFT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LYFT is 37.2. 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 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 gained 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, LYFT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LYFT were disappointed as the stock returned -28.1% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
Follow Lyft Inc. (NASDAQ:LYFT)
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Disclosure: None. This article was originally published at Insider Monkey.
