The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Pinterest, Inc. (NYSE:PINS) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Pinterest, Inc. (NYSE:PINS) has experienced a decrease in enthusiasm from smart money in recent months. Pinterest, Inc. (NYSE:PINS) was in 58 hedge funds’ portfolios at the end of September. The all time high for this statistic is 95. Our calculations also showed that PINS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Philippe Laffont of Coatue Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to take a look at the fresh hedge fund action encompassing Pinterest, Inc. (NYSE:PINS).
Do Hedge Funds Think PINS Is A Good Stock To Buy Now?
At Q3’s end, a total of 58 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the second quarter of 2021. On the other hand, there were a total of 80 hedge funds with a bullish position in PINS 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 Pinterest, Inc. (NYSE:PINS) was held by Rokos Capital Management, which reported holding $448.4 million worth of stock at the end of September. It was followed by Viking Global with a $368.4 million position. Other investors bullish on the company included Coatue Management, Citadel Investment Group, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Half Sky Capital allocated the biggest weight to Pinterest, Inc. (NYSE:PINS), around 31.76% of its 13F portfolio. VGI Partners is also relatively very bullish on the stock, earmarking 13.18 percent of its 13F equity portfolio to PINS.
Due to the fact that Pinterest, Inc. (NYSE:PINS) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there was a specific group of funds who were dropping their full holdings in the third quarter. It’s worth mentioning that Panayotis Takis Sparaggis’s Alkeon Capital Management sold off the biggest stake of all the hedgies monitored by Insider Monkey, valued at about $356.7 million in stock, and Gaurav Kapadia’s XN Exponent Advisors was right behind this move, as the fund cut about $132 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 5 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Pinterest, Inc. (NYSE:PINS). We will take a look at Waste Connections, Inc. (NYSE:WCN), CBRE Group, Inc. (NYSE:CBRE), Affirm Holdings, Inc. (NASDAQ:AFRM), Verisk Analytics, Inc. (NASDAQ:VRSK), EPAM Systems Inc (NYSE:EPAM), Nasdaq, Inc. (NASDAQ:NDAQ), and Cummins Inc. (NYSE:CMI). This group of stocks’ market valuations match PINS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WCN | 32 | 785747 | 0 |
| CBRE | 37 | 3096989 | 0 |
| AFRM | 39 | 1491413 | 14 |
| VRSK | 25 | 1638278 | -11 |
| EPAM | 42 | 945738 | 9 |
| NDAQ | 21 | 257290 | -2 |
| CMI | 30 | 830044 | -15 |
| Average | 32.3 | 1292214 | -0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.3 hedge funds with bullish positions and the average amount invested in these stocks was $1292 million. That figure was $2007 million in PINS’s case. EPAM Systems Inc (NYSE:EPAM) is the most popular stock in this table. On the other hand Nasdaq, Inc. (NASDAQ:NDAQ) is the least popular one with only 21 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 68.3. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, PINS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PINS were disappointed as the stock returned -42% since the end of the third quarter (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
Follow Pinterest Inc. (NYSE:PINS)
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Disclosure: None. This article was originally published at Insider Monkey.
