5 Undervalued Stocks Hedge Funds Are Talking About

1. Pinterest (PINS)

VGI Partners, in its Q4 2021 investor letter, mentioned Pinterest, Inc. (NYSE: PINS) and discussed its stance on the firm. This is the second time this week a fund manager talked strongly about Pinterest which is why the stock is placed at the #1 spot on our list.

Here is what VGI Partners has to say about Pinterest, Inc. in its Q4 2021 investor letter:

“Pinterest is a holding we have discussed in detail previously but, given it was the largest portfolio detractor in 2021, we believe it warrants a detailed update. We continue to believe Pinterest is a unique visual search engine with its ~450 million monthly active users (MAUs), and is a highly differentiated platform, uniquely combining search with the network effects of a social media platform.

Most users visit the platform with a specific purpose and typically use the platform for inspiration. Compared to other social networks, purchase intent is high, with approximately 55% of Pinterest users on the platform there to find or purchase products or services. The high purchase intent of the user has made Pinterest an increasingly attractive place for brands to advertise – it is arguably the only platform where advertisements do not damage the user experience and in fact improve it (arguably alongside Google). It also happens to be a relatively safe space to advertise online, with minimal to no abusive or controversial content present on the platform.

This has resulted in significant improvement in monetisation, with revenues growing by over 5 times since 2016 and by almost 50% in both 2020 and 2021. Notwithstanding this, the stock has performed poorly over the last 12 months due to user growth coming to a halt. As users were locked down at home during COVID outbreaks, Pinterest benefited from rapid growth in engagement, for instance users stuck at home looking for inspiration on a home renovation. On the other side of lockdowns, some of Pinterest’s more casual users have returned to normal routines and reduced their usage of the platform…” (Click here to see the full text)

Our calculations show that Pinterest, Inc. (NYSE: PINS) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. PINS was in 58 hedge fund portfolios at the end of the third quarter of 2021, compared to 63 funds in the previous quarter. Pinterest, Inc. (NYSE: PINS) delivered a -32.33% return in the past 3 months. This may be the time to get back into PINS.

Don’t forget to check out our collection of 2021 Q4 Hedge Fund Investor Letters and 10 Stocks To Buy Amid Rising Interest Rates.

Disclosure: None.