Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Youngevity International, Inc. (NASDAQ:YGYI)? The smart money sentiment can provide an answer to this question.
Youngevity International, Inc. (NASDAQ:YGYI) has experienced a decrease in enthusiasm from smart money of late. Youngevity International, Inc. (NASDAQ:YGYI) was in 3 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 4. There were 4 hedge funds in our database with YGYI holdings at the end of June. Our calculations also showed that YGYI 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world 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.With all of this in mind let’s view the new hedge fund action encompassing Youngevity International, Inc. (NASDAQ:YGYI).
How are hedge funds trading Youngevity International, Inc. (NASDAQ:YGYI)?
At Q3’s end, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from one quarter earlier. On the other hand, there were a total of 2 hedge funds with a bullish position in YGYI a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Youngevity International, Inc. (NASDAQ:YGYI) was held by Millennium Management, which reported holding $0 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $0 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.
Since Youngevity International, Inc. (NASDAQ:YGYI) has faced falling interest from the smart money, we can see that there exists a select few money managers that elected to cut their full holdings in the third quarter. Interestingly, Donald Sussman’s Paloma Partners said goodbye to the biggest investment of the “upper crust” of funds watched by Insider Monkey, worth an estimated $0 million in stock. Karim Abbadi and Edward McBride’s fund, Centiva Capital, also sold off its stock, about $0 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 1 funds in the third quarter.
Let’s go over hedge fund activity in other stocks similar to Youngevity International, Inc. (NASDAQ:YGYI). We will take a look at Pacific Drilling SA (NYSE:PACD), Eyegate Pharmaceuticals, Inc. (NASDAQ:EYEG), FARMMI, INC. (NASDAQ:FAMI), Mercurity Fintech Holding Inc. (NASDAQ:MFH), FTS International, Inc. (NYSE:FTSI), Cyclacel Pharmaceuticals Inc (NASDAQ:CYCC), and BSQUARE Corporation (NASDAQ:BSQR). This group of stocks’ market values resemble YGYI’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 1.4 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $0 million in YGYI’s case. Pacific Drilling SA (NYSE:PACD) is the most popular stock in this table. On the other hand Eyegate Pharmaceuticals, Inc. (NASDAQ:EYEG) is the least popular one with only 1 bullish hedge fund positions. Youngevity International, Inc. (NASDAQ:YGYI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for YGYI is 76.5. 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 28.1% in 2020 through November 23rd and beat the market again by 15.4 percentage points. Unfortunately YGYI wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on YGYI were disappointed as the stock returned -48.3% since the end of September (through 11/23) 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.
Disclosure: None. This article was originally published at Insider Monkey.