Were Hedge Funds Right About Embracing Yandex NV (YNDX)?

We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Peltz’s recent General Electric losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Yandex NV (NASDAQ:YNDX).

Is Yandex NV (NASDAQ:YNDX) the right investment to pursue these days? Investors who are in the know were in an optimistic mood. The number of bullish hedge fund positions advanced by 9 lately. Yandex NV (NASDAQ:YNDX) was in 44 hedge funds’ portfolios at the end of June. The all time high for this statistics is 48. Our calculations also showed that YNDX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 35 hedge funds in our database with YNDX holdings at the end of March.

Video: Watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 56 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 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

John Armitage Egerton Capital

John Armitage of Egerton Capital

Keeping this in mind we’re going to go over the latest hedge fund action encompassing Yandex NV (NASDAQ:YNDX).

What does smart money think about Yandex NV (NASDAQ:YNDX)?

At the end of the second quarter, a total of 44 of the hedge funds tracked by Insider Monkey were long this stock, a change of 26% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in YNDX over the last 20 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Ken Fisher’s Fisher Asset Management has the number one position in Yandex NV (NASDAQ:YNDX), worth close to $294.4 million, accounting for 0.3% of its total 13F portfolio. Coming in second is Egerton Capital Limited, managed by John Armitage, which holds a $272.6 million position; 2% of its 13F portfolio is allocated to the stock. Other professional money managers that hold long positions include Rajiv Jain’s GQG Partners, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Josh Resnick’s Jericho Capital Asset Management. In terms of the portfolio weights assigned to each position Solel Partners allocated the biggest weight to Yandex NV (NASDAQ:YNDX), around 7.49% of its 13F portfolio. Tiger Legatus Capital is also relatively very bullish on the stock, earmarking 4.2 percent of its 13F equity portfolio to YNDX.

As one would reasonably expect, key hedge funds have jumped into Yandex NV (NASDAQ:YNDX) headfirst. Jericho Capital Asset Management, managed by Josh Resnick, created the most valuable position in Yandex NV (NASDAQ:YNDX). Jericho Capital Asset Management had $57.8 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $40.7 million position during the quarter. The other funds with brand new YNDX positions are Emanuel J. Friedman’s EJF Capital, Schonfeld Strategic Advisors, and Matthew L Pinz’s Pinz Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Yandex NV (NASDAQ:YNDX) but similarly valued. We will take a look at Peloton Interactive, Inc. (NASDAQ:PTON), CGI Inc. (NYSE:GIB), Fox Corporation (NASDAQ:FOX), Fox Corporation (NASDAQ:FOXA), Maxim Integrated Products Inc. (NASDAQ:MXIM), Laboratory Corp. of America Holdings (NYSE:LH), and Amcor plc (NYSE:AMCR). All of these stocks’ market caps match YNDX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PTON 50 2109831 14
GIB 19 259686 1
FOX 20 566122 -2
FOXA 35 1611691 -3
MXIM 33 323780 3
LH 52 1579826 7
AMCR 16 201571 -3
Average 32.1 950358 2.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.1 hedge funds with bullish positions and the average amount invested in these stocks was $950 million. That figure was $1404 million in YNDX’s case. Laboratory Corp. of America Holdings (NYSE:LH) is the most popular stock in this table. On the other hand Amcor plc (NYSE:AMCR) is the least popular one with only 16 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 76.4. 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 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 30% in 2020 through October 23rd and still beat the market by 21 percentage points. Hedge funds were also right about betting on YNDX as the stock returned 18.2% since the end of Q2 (through 10/23) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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