Do Hedge Funds Love Peloton Interactive, Inc. (PTON)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at 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. In this article we look at what those investors think of Peloton Interactive, Inc. (NASDAQ:PTON).

Peloton Interactive, Inc. (NASDAQ:PTON) investors should pay attention to a decrease in hedge fund sentiment in recent months. Peloton Interactive, Inc. (NASDAQ:PTON) was in 62 hedge funds’ portfolios at the end of September. The all time high for this statistic is 67. Our calculations also showed that PTON isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

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. With all of this in mind let’s go over the recent hedge fund action surrounding Peloton Interactive, Inc. (NASDAQ:PTON).

Daniel Sundheim of D1 Capital Partners

Do Hedge Funds Think PTON Is A Good Stock To Buy Now?

At Q3’s end, a total of 62 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PTON over the last 25 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Chase Coleman’s Tiger Global Management LLC has the number one position in Peloton Interactive, Inc. (NASDAQ:PTON), worth close to $626.5 million, comprising 1.2% of its total 13F portfolio. On Tiger Global Management LLC’s heels is D1 Capital Partners, led by Daniel Sundheim, holding a $599.1 million position; 3.3% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish contain Andreas Halvorsen’s Viking Global, Brad Gerstner’s Altimeter Capital Management and Philippe Laffont’s Coatue Management. In terms of the portfolio weights assigned to each position Anatole Investment Management allocated the biggest weight to Peloton Interactive, Inc. (NASDAQ:PTON), around 17.04% of its 13F portfolio. Woodson Capital Management is also relatively very bullish on the stock, setting aside 11.62 percent of its 13F equity portfolio to PTON.

Due to the fact that Peloton Interactive, Inc. (NASDAQ:PTON) has experienced declining sentiment from hedge fund managers, logic holds that there was a specific group of hedge funds who were dropping their entire stakes in the third quarter. Interestingly, Eashwar Krishnan’s Tybourne Capital Management said goodbye to the biggest investment of the 750 funds monitored by Insider Monkey, valued at about $293 million in stock, and Renaissance Technologies was right behind this move, as the fund said goodbye to about $139.4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 5 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Peloton Interactive, Inc. (NASDAQ:PTON). We will take a look at Best Buy Co., Inc. (NYSE:BBY), Interactive Brokers Group, Inc. (NASDAQ:IBKR), Energy Transfer L.P. (NYSE:ET), ONEOK, Inc. (NYSE:OKE), Generac Holdings Inc. (NYSE:GNRC), Consolidated Edison, Inc. (NYSE:ED), and Albemarle Corporation (NYSE:ALB). All of these stocks’ market caps are closest to PTON’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 29.7 hedge funds with bullish positions and the average amount invested in these stocks was $631 million. That figure was $4634 million in PTON’s case. Generac Holdings Inc. (NYSE:GNRC) is the most popular stock in this table. On the other hand ONEOK, Inc. (NYSE:OKE) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Peloton Interactive, Inc. (NASDAQ:PTON) is more popular among hedge funds. Our overall hedge fund sentiment score for PTON is 77.8. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately PTON wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PTON were disappointed as the stock returned -49.5% since the end of the third quarter (through 11/30) 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 most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.