After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Facebook Inc (NASDAQ:FB).
Is Facebook Inc (NASDAQ:FB) a buy right now? The best stock pickers were turning bullish. The number of bullish hedge fund positions improved by 9 lately. Facebook Inc (NASDAQ:FB) was in 266 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 257. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that FB ranked #2 among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 257 hedge funds in our database with FB positions at the end of the first quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Aaron Cowen of Suvretta Capital Management
With all of this in mind we’re going to take a gander at the key hedge fund action encompassing Facebook Inc (NASDAQ:FB).
Do Hedge Funds Think FB Is A Good Stock To Buy Now?
At the end of June, a total of 266 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. By comparison, 210 hedge funds held shares or bullish call options in FB a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Citadel Investment Group was the largest shareholder of Facebook Inc (NASDAQ:FB), with a stake worth $4804 million reported as of the end of June. Trailing Citadel Investment Group was Eagle Capital Management, which amassed a stake valued at $2581.4 million. Fundsmith LLP, Tiger Global Management LLC, and Lone Pine Capital 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 Immersion Capital allocated the biggest weight to Facebook Inc (NASDAQ:FB), around 32.85% of its 13F portfolio. Arrow Capital Management is also relatively very bullish on the stock, designating 31.97 percent of its 13F equity portfolio to FB.
As industrywide interest jumped, specific money managers were breaking ground themselves. Soroban Capital Partners, managed by Eric W. Mandelblatt and Gaurav Kapadia, created the most valuable position in Facebook Inc (NASDAQ:FB). Soroban Capital Partners had $692.6 million invested in the company at the end of the quarter. George Yang’s Anatole Investment Management also made a $175.3 million investment in the stock during the quarter. The following funds were also among the new FB investors: Anand Desai’s Darsana Capital Partners, Aaron Cowen’s Suvretta Capital Management, and Patrick Degorce’s Theleme Partners.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Facebook Inc (NASDAQ:FB) but similarly valued. These stocks are Tesla Inc. (NASDAQ:TSLA), Berkshire Hathaway Inc. (NYSE:BRK-B), Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM), Alibaba Group Holding Limited (NYSE:BABA), Visa Inc (NYSE:V), NVIDIA Corporation (NASDAQ:NVDA), and JPMorgan Chase & Co. (NYSE:JPM). This group of stocks’ market values resemble FB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TSLA | 60 | 9296858 | -2 |
| BRK-B | 116 | 22380662 | 5 |
| TSM | 64 | 10694405 | -12 |
| BABA | 146 | 16793500 | 11 |
| V | 162 | 27609638 | -2 |
| NVDA | 86 | 9098047 | 6 |
| JPM | 108 | 4928203 | -3 |
| Average | 106 | 14400188 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 106 hedge funds with bullish positions and the average amount invested in these stocks was $14400 million. That figure was $42350 million in FB’s case. Visa Inc (NYSE:V) is the most popular stock in this table. On the other hand Tesla Inc. (NASDAQ:TSLA) is the least popular one with only 60 bullish hedge fund positions. Compared to these stocks Facebook Inc (NASDAQ:FB) is more popular among hedge funds. Our overall hedge fund sentiment score for FB is 99.5. 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 26.3% in 2021 through October 29th and still beat the market by 2.3 percentage points. Unfortunately FB wasn’t nearly as successful as these 5 stocks over the last four months and hedge funds that were betting on FB were disappointed as the stock returned -6.9% since the end of the second quarter 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.
