World-class money managers like Bill Ackman and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
58.com Inc (ADR) (NYSE:WUBA) investors should be aware of an increase in hedge fund sentiment recently. 58.com Inc (ADR) (NYSE:WUBA) was in 28 hedge funds’ portfolios at the end of the third quarter of 2015. There were 24 hedge funds in our database with 58.com Inc (ADR) (NYSE:WUBA) holdings at the end of the previous quarter. At the end of this article, we will also compare 58.com Inc (ADR) (NYSE:WUBA) to other stocks, including Spectrum Brands Holdings, Inc. (NYSE:SPB), Range Resources Corp. (NYSE:RRC), and Service Corporation International (NYSE:SCI) to get a better sense of its popularity.
In today’s marketplace, there are a lot of methods stock traders put to use to appraise stocks. A pair of the most underrated methods are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the top money managers can outclass the broader indices by a healthy margin (see the details here).
With all of this in mind, we’re going to check out the key action regarding 58.com Inc (ADR) (NYSE:WUBA).
What have hedge funds been doing with 58.com Inc (ADR) (NYSE:WUBA)?
At the end of September, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 17% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, OZ Management, managed by Daniel S. Och, holds the most valuable position in 58.com Inc (ADR) (NYSE:WUBA). OZ Management has a $150.8 million position in the stock, comprising 0.5% of its 13F portfolio. Sitting at the No. 2 spot is Viking Global, managed by Andreas Halvorsen, which holds an $80.9 million position; 0.3% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that hold long positions comprise Glen Kacher’s Light Street Capital, J Kevin Kenny Jr’s Emerging Sovereign Group and Lei Zhang’s Hillhouse Capital Management.
As aggregate interest increased, key hedge funds have jumped into 58.com Inc (ADR) (NYSE:WUBA) headfirst. OZ Management also made a $27.2 million investment in the stock during the quarter. The following funds were also among the new 58.com Inc (ADR) (NYSE:WUBA) investors: Alex Sacerdote’s Whale Rock Capital Management, Karthik Sarma’s SRS Investment Management, and Fang Zheng’s Keywise Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as 58.com Inc (ADR) (NYSE:WUBA) but similarly valued. These stocks are Spectrum Brands Holdings, Inc. (NYSE:SPB), Range Resources Corp. (NYSE:RRC), Service Corporation International (NYSE:SCI), and Westar Energy Inc (NYSE:WR). This group of stocks’ market caps is closer to 58.com Inc (ADR) (NYSE:WUBA)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SPB | 25 | 546965 | -4 |
| RRC | 31 | 744711 | -11 |
| SCI | 37 | 607274 | 12 |
| WR | 10 | 122099 | 1 |
As you can see, these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $505 million. That figure was $502 million in 58.com Inc (ADR) (NYSE:WUBA)’s case. Service Corporation International (NYSE:SCI) is the most popular stock in this table. On the other hand, Westar Energy Inc (NYSE:WR) is the least popular one with only 10 bullish hedge fund positions. 58.com Inc (ADR) (NYSE:WUBA) 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. In this regard, Service Corporation International (NYSE:SCI) might be a better candidate to consider a long position.
