Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is WisdomTree Investments, Inc. (NASDAQ:WETF), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is WisdomTree Investments, Inc. (NASDAQ:WETF) a sound investment right now? The smart money was in a pessimistic mood. The number of long hedge fund positions dropped by 3 lately. WisdomTree Investments, Inc. (NASDAQ:WETF) was in 23 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 26. Our calculations also showed that WETF isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 26 hedge funds in our database with WETF holdings at the end of June.
Jim Simons of Renaissance Technologies
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 let’s take a gander at the fresh hedge fund action regarding WisdomTree Investments, Inc. (NASDAQ:WETF).
Do Hedge Funds Think WETF Is A Good Stock To Buy Now?
At third quarter’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -12% from the second quarter of 2021. On the other hand, there were a total of 22 hedge funds with a bullish position in WETF a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
More specifically, Lynrock Lake was the largest shareholder of WisdomTree Investments, Inc. (NASDAQ:WETF), with a stake worth $74.1 million reported as of the end of September. Trailing Lynrock Lake was Azora Capital, which amassed a stake valued at $26.6 million. Renaissance Technologies, Fisher Asset Management, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Lynrock Lake allocated the biggest weight to WisdomTree Investments, Inc. (NASDAQ:WETF), around 4.57% of its 13F portfolio. Azora Capital is also relatively very bullish on the stock, designating 3.16 percent of its 13F equity portfolio to WETF.
Seeing as WisdomTree Investments, Inc. (NASDAQ:WETF) has faced declining sentiment from the smart money, logic holds that there exists a select few money managers that slashed their positions entirely last quarter. Intriguingly, Nick Thakore’s Diametric Capital dumped the largest investment of the “upper crust” of funds watched by Insider Monkey, totaling an estimated $1.3 million in stock, and Paul Tudor Jones’s Tudor Investment Corp was right behind this move, as the fund dropped about $0.8 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 3 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to WisdomTree Investments, Inc. (NASDAQ:WETF). These stocks are Oric Pharmaceuticals, Inc. (NASDAQ:ORIC), ACCO Brands Corporation (NYSE:ACCO), MagnaChip Semiconductor Corporation (NYSE:MX), Sohu.com Limited (NASDAQ:SOHU), Immatics N.V. (NASDAQ:IMTX), Edgewise Therapeutics, Inc. (NASDAQ:EWTX), and OneBeacon Insurance Group, Ltd. (NYSE:OB). This group of stocks’ market caps are closest to WETF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ORIC | 10 | 184809 | -1 |
| ACCO | 14 | 34285 | -1 |
| MX | 35 | 263536 | 0 |
| SOHU | 14 | 111806 | 2 |
| IMTX | 23 | 234534 | -1 |
| EWTX | 14 | 530164 | -1 |
| OB | 6 | 21435 | 6 |
| Average | 16.6 | 197224 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.6 hedge funds with bullish positions and the average amount invested in these stocks was $197 million. That figure was $146 million in WETF’s case. MagnaChip Semiconductor Corporation (NYSE:MX) is the most popular stock in this table. On the other hand OneBeacon Insurance Group, Ltd. (NYSE:OB) is the least popular one with only 6 bullish hedge fund positions. WisdomTree Investments, Inc. (NASDAQ:WETF) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WETF is 57.8. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Hedge funds were also right about betting on WETF as the stock returned 11.5% since the end of Q3 (through 12/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
