Last year’s fourth quarter was a rough one for investors and many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by more than 6 percentage points, as investors fled less-known quantities for safe havens. Luckily hedge funds were shifting their holdings into large-cap stocks. The 20 most popular hedge fund stocks actually generated an average return of 37.4% in 2019 (through the end of November) and outperformed the S&P 500 ETF by 9.9 percentage points. We are done processing the latest 13F filings and in this article we will study how hedge fund sentiment towards Blue Apron Holdings, Inc. (NYSE:APRN) changed during the first quarter.
Blue Apron Holdings, Inc. (NYSE:APRN) shareholders have witnessed an increase in hedge fund sentiment of late. Our calculations also showed that APRN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are a large number of methods market participants employ to analyze their stock investments. A pair of the most innovative methods are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the elite money managers can outperform the S&P 500 by a solid amount (see the details here).
Jim Simons of Renaissance Technologies
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to analyze the new hedge fund action surrounding Blue Apron Holdings, Inc. (NYSE:APRN).
How have hedgies been trading Blue Apron Holdings, Inc. (NYSE:APRN)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 60% from the previous quarter. On the other hand, there were a total of 4 hedge funds with a bullish position in APRN a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Chet Kapoor’s Tenzing Global Investors has the biggest position in Blue Apron Holdings, Inc. (NYSE:APRN), worth close to $4.6 million, comprising 2.4% of its total 13F portfolio. On Tenzing Global Investors’s heels is Renaissance Technologies, which holds a $3.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish include David Greenspan’s Slate Path Capital, Zachary Miller’s Parian Global Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Tenzing Global Investors allocated the biggest weight to Blue Apron Holdings, Inc. (NYSE:APRN), around 2.38% of its 13F portfolio. Parian Global Management is also relatively very bullish on the stock, designating 1.14 percent of its 13F equity portfolio to APRN.
Now, key money managers have been driving this bullishness. Slate Path Capital, managed by David Greenspan, initiated the largest position in Blue Apron Holdings, Inc. (NYSE:APRN). Slate Path Capital had $2.7 million invested in the company at the end of the quarter. Zachary Miller’s Parian Global Management also initiated a $2.5 million position during the quarter. The only other fund with a brand new APRN position is Sculptor Capital.
Let’s now review hedge fund activity in other stocks similar to Blue Apron Holdings, Inc. (NYSE:APRN). We will take a look at Hallador Energy Co (NASDAQ:HNRG), Jounce Therapeutics, Inc. (NASDAQ:JNCE), SB Financial Group, Inc. (NASDAQ:SBFG), and OncoCyte Corporation (NYSE:OCX). This group of stocks’ market values resemble APRN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HNRG | 9 | 3911 | 0 |
| JNCE | 9 | 2064 | -1 |
| SBFG | 3 | 11334 | 0 |
| OCX | 4 | 23596 | -2 |
| Average | 6.25 | 10226 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.25 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $15 million in APRN’s case. Hallador Energy Co (NASDAQ:HNRG) is the most popular stock in this table. On the other hand SB Financial Group, Inc. (NASDAQ:SBFG) is the least popular one with only 3 bullish hedge fund positions. Blue Apron Holdings, Inc. (NYSE:APRN) is not the most popular stock in this group but hedge fund interest is still above average. 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately APRN wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on APRN were disappointed as the stock returned -20% during the fourth quarter (through the end of November) 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.
