Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Pinterest, Inc. (NYSE:PINS) to find out whether there were any major changes in hedge funds’ views.
Pinterest, Inc. (NYSE:PINS) shareholders have witnessed an increase in hedge fund sentiment lately. Pinterest, Inc. (NYSE:PINS) was in 95 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic was previously 80. This means the bullish number of hedge fund positions in this stock reached another all time high. There were 80 hedge funds in our database with PINS positions at the end of the third quarter. Our calculations also showed that PINS ranked #27 among the 30 most popular stocks among hedge funds (click for Q4 rankings).
David E. Shaw of D.E. Shaw
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Do Hedge Funds Think PINS Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 95 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 19% from the third quarter of 2020. On the other hand, there were a total of 37 hedge funds with a bullish position in PINS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Alkeon Capital Management was the largest shareholder of Pinterest, Inc. (NYSE:PINS), with a stake worth $668 million reported as of the end of December. Trailing Alkeon Capital Management was Melvin Capital Management, which amassed a stake valued at $570.6 million. Whale Rock Capital Management, ARK Investment Management, and D E Shaw 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 Half Sky Capital allocated the biggest weight to Pinterest, Inc. (NYSE:PINS), around 23.29% of its 13F portfolio. Empirical Capital Partners is also relatively very bullish on the stock, designating 16.48 percent of its 13F equity portfolio to PINS.
As industrywide interest jumped, some big names were breaking ground themselves. Renaissance Technologies, initiated the most outsized position in Pinterest, Inc. (NYSE:PINS). Renaissance Technologies had $212.7 million invested in the company at the end of the quarter. Rajiv Jain’s GQG Partners also initiated a $93.9 million position during the quarter. The other funds with new positions in the stock are Gaurav Kapadia’s XN Exponent Advisors, Li Ran’s Half Sky Capital, and Geraldine McManus and Andrew Walter’s Granger Management.
Let’s now review hedge fund activity in other stocks similar to Pinterest, Inc. (NYSE:PINS). These stocks are Thomson Reuters Corporation (NYSE:TRI), Barrick Gold Corporation (NYSE:GOLD), Public Storage (NYSE:PSA), Match Group, Inc. (NASDAQ:MTCH), Rocket Companies, Inc. (NYSE:RKT), TE Connectivity Ltd. (NYSE:TEL), and KLA Corporation (NASDAQ:KLAC). All of these stocks’ market caps are closest to PINS’s market cap.
[table]
Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position
TRI,23,360755,4
GOLD,53,1751874,1
PSA,31,1038430,14
MTCH,72,3780895,11
RKT,16,222897,-6
TEL,39,2164724,6
KLAC,36,925910,3
Average,38.6,1463641,4.7
[/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.6 hedge funds with bullish positions and the average amount invested in these stocks was $1464 million. That figure was $5840 million in PINS’s case. Match Group, Inc. (NASDAQ:MTCH) is the most popular stock in this table. On the other hand Rocket Companies, Inc. (NYSE:RKT) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Pinterest, Inc. (NYSE:PINS) is more popular among hedge funds. Our overall hedge fund sentiment score for PINS is 90. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still managed to beat the market by 0.9 percentage points. Hedge funds were also right about betting on PINS, though not to the same extent, as the stock returned 12.2% since the end of December (through April 19th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
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