In this article, we discuss the 10 stocks better than Coinbase according to hedge funds. If you want to skip our detailed analysis of these stocks, go directly to the 5 Stocks Better than Coinbase According to Hedge Funds.
After a record rally through the past year, the prices of crypto stocks have taken a beating over the past few months amid concerns around regulation and a crackdown in China. Coinbase Global, Inc. (NASDAQ:COIN), the Delaware-based financial infrastructure and technology firm for the crypto economy, is perhaps the most prominent crypto stock on the market. After a record debut on the market in April, the stock has fallen sharply from a record high of $429 per share on April 14. It was trading at around $251 per share on October 8.
Despite the setback, crypto stocks like Coinbase Global, Inc. (NASDAQ:COIN) are on the comeback trail as the price of Bitcoin, the most popular cryptocurrency, rises again. Bitcoin touched a record high of $64,000 in April before falling to below $40,000 within weeks. Presently, the coin is trading at around $55,000. The Delaware-based firm has also started taking concrete measures to stabilize the stock, including a proposal to pitch crypto regulations to officials in the US government.
Coinbase Global, Inc. (NASDAQ:COIN) is likely to encounter many challenges as it seeks to push the stock higher. In addition to valuation concerns around the company that have dogged progress since the IPO, there are some security concerns that are starting to rear their head too. On October 1, the company revealed that hackers had stolen from at least 6,000 customer accounts at the firm between March and June this year. The company added it was working with law enforcement agencies to identify the culprits.
Despite the setback, the hedge fund sentiment around Coinbase Global, Inc. (NASDAQ:COIN) is mostly positive. At the end of the second quarter of 2021, 49 hedge funds in the database of Insider Monkey held stakes worth $2.9 billion in Coinbase Global, Inc. (NASDAQ:COIN). Out of the hedge funds being tracked by Insider Monkey, New York-based firm ARK Investment Management, led by crypto bull Cathie Wood, is a leading shareholder in the firm with 5.6 million shares worth more than $1.4 billion.
For investors who have security concerns around crypto and are looking for less volatile options on the market, there are many finance stocks that could provide a better alternative. Some of the stocks that hedge funds presently prefer over Coinbase Global, Inc. (NASDAQ:COIN) include Bank of America Corporation (NYSE:BAC), Citigroup Inc. (NYSE:C), and Morgan Stanley (NYSE:MS), among others discussed in detail below. There is little doubt that the rapid digitization of the world economy has transformed the finance world.
The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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Our Methodology
With this context in mind, here is our list of the 10 stocks better than Coinbase according to hedge funds. These were picked from a database of hedge funds tracked by Insider Monkey. Only those companies that have more hedge funds with stakes in them, as compared to Coinbase Global, Inc. (NASDAQ:COIN), at the end of the second quarter of 2021 were selected for the list.
The list is ranked according to the number of hedge funds having stakes in each company. Data from the 873 funds tracked by Insider Monkey was used for this purpose.
Special importance was assigned to outlining the analyst ratings and business fundamentals for each firm to provide readers with some context so they can make more informed investment choices.
Stocks Better than Coinbase According to Hedge Funds
10. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 52
American Express Company (NYSE:AXP) is placed tenth on our list of 10 stocks better than Coinbase Global, Inc. (NASDAQ:COIN). The firm provides charge and credit payment products. It operates from New York.
On September 16, investment advisory Bank of America upgraded American Express Company (NYSE:AXP) stock to Neutral from Underperform with a price target of $169, noting that the risk/reward on the stock had become more balanced after recent underperformance.
Out of the hedge funds being tracked by Insider Monkey, Washington-based firm Fisher Asset Management is a leading shareholder in American Express Company (NYSE:AXP) with 15.3 million shares worth more than $2.5 billion.
Just like Bank of America Corporation (NYSE:BAC), Citigroup Inc. (NYSE:C), and Morgan Stanley (NYSE:MS), American Express Company (NYSE:AXP) is one of the stocks on the radar of institutional investors.
In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and American Express Company (NYSE:AXP) was one of them. Here is what the fund said:
“In financials, American Express has done an excellent job demonstrating the resiliency of its franchise in the midst of a global pandemic that drove a 60% decline in its core travel and entertainment business. The company’s spend-centric model has been helped by fiscal stimulus ensuring a flush consumer, while management continues to execute well by adding millions of new consumer and small and medium business accounts, which should benefit the franchise over the medium to long term. We remain optimistic regarding the company’s prospects as travel and entertainment activity rebounds, adding to our position in the quarter.”
9. The Bank of New York Mellon Corporation (NYSE:BK)
Number of Hedge Fund Holders: 52
The Bank of New York Mellon Corporation (NYSE:BK) is ranked ninth on our list of 10 stocks better than Coinbase Global, Inc. (NASDAQ:COIN). The firm provides an array of financial products and services. It is headquartered in New York.
On September 15, investment advisory Citi kept a Buy rating on The Bank of New York Mellon Corporation (NYSE:BK) stock and raised the price target to $60 from $56, noting there was optimism around the near-term growth trajectory of the firm.
At the end of the second quarter of 2021, 52 hedge funds in the database of Insider Monkey held stakes worth $4.9 billion in The Bank of New York Mellon Corporation (NYSE:BK), up from 49 the preceding quarter worth $4.7 billion.
Alongside Bank of America Corporation (NYSE:BAC), Citigroup Inc. (NYSE:C), and Morgan Stanley (NYSE:MS), The Bank of New York Mellon Corporation (NYSE:BK) is one of the stocks that hedge funds are buying.
8. KKR & Co. Inc. (NYSE:KKR)
Number of Hedge Fund Holders: 54
KKR & Co. Inc. (NYSE:KKR) is a New York-based private equity and real estate investment firm. It is placed eighth on our list of 10 stocks better than Coinbase Global, Inc. (NASDAQ:COIN).
On October 7, investment advisory Jefferies resumed coverage of KKR & Co. Inc. (NYSE:KKR) stock with a Buy rating and raised the price target to $74 from $66. Gerald O’Hara, an analyst at the advisory, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, California-based investment firm ValueAct Capital is a leading shareholder in KKR & Co. Inc. (NYSE:KKR) with 27 million shares worth more than $1.6 billion.
In its Q2 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and KKR & Co. Inc. (NYSE:KKR) was one of them. Here is what the fund said:
“KKR & Co. Inc. was also a material contributor during the quarter. This company has deep and growing relationships with capital providers. The company has a stable management fee stream and a proven ability to convert investor capital into a performance fee stream. These attributes contribute to its stable and growing intrinsic values. In addition, the company enjoy nice tailwinds of increasing allocations to private and alternative investments. We are pleased to continue to own KKR & Co.”
7. Ally Financial Inc. (NYSE:ALLY)
Number of Hedge Fund Holders: 54
Ally Financial Inc. (NYSE:ALLY) is a Michigan-based bank holding company. It is ranked seventh on our list of 10 stocks better than Coinbase Global, Inc. (NASDAQ:COIN).
On July 22, investment advisory Citi maintained a Buy rating on Ally Financial Inc. (NYSE:ALLY) stock and raised the price target to $63 from $59, underlining a bullish outlook on the firm for the next few years based on margins and production.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in Ally Financial Inc. (NYSE:ALLY) with 24 million shares worth more than $1.2 billion.
Bank of America Corporation (NYSE:BAC), Citigroup Inc. (NYSE:C), and Morgan Stanley (NYSE:MS) are some of the top finance stocks to buy now, just like Ally Financial Inc. (NYSE:ALLY).
6. CME Group Inc. (NASDAQ:CME)
Number of Hedge Fund Holders: 62
CME Group Inc. (NASDAQ:CME) is placed sixth on our list of 10 stocks better than Coinbase Global, Inc. (NASDAQ:COIN). The firm operates in the financial exchanges industry and is headquartered in Illinois.
On September 14, investment advisory Atlantic Partners upgraded CME Group Inc. (NASDAQ:CME) stock to Overweight from Neutral with a price target of $230, noting the earnings power of the firm was favorable.
At the end of the second quarter of 2021, 62 hedge funds in the database of Insider Monkey held stakes worth $2.6 billion in CME Group Inc. (NASDAQ:CME), up from 60 the preceding quarter worth $2.3 billion.
In its Q1 2021 investor letter, Cooper Investors, an asset management firm, highlighted a few stocks and CME Group Inc. (NASDAQ:CME) was one of them. Here is what the fund said:
“CME has been owned by the portfolio for five years. CME’s strategic positioning as a monopolistic global financial exchange operator will continue to afford the business a highly attractive margin profile. CME is well managed however we can no longer identify clear value latency opportunities for the management team to execute against and so decided to exit our position.”
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Disclosure. None. 10 Stocks Better than Coinbase (COIN) According to Hedge Funds is originally published on Insider Monkey.
