Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of GrubHub Inc (NYSE:GRUB).
GrubHub Inc (NYSE:GRUB) was in 32 hedge funds’ portfolios at the end of the first quarter of 2020. GRUB investors should be aware of a decrease in support from the world’s most elite money managers recently. There were 33 hedge funds in our database with GRUB positions at the end of the previous quarter. Our calculations also showed that GRUB isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 51 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a peek at the latest hedge fund action surrounding GrubHub Inc (NYSE:GRUB).
How are hedge funds trading GrubHub Inc (NYSE:GRUB)?
Heading into the second quarter of 2020, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the previous quarter. On the other hand, there were a total of 32 hedge funds with a bullish position in GRUB a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in GrubHub Inc (NYSE:GRUB) was held by Citadel Investment Group, which reported holding $92.9 million worth of stock at the end of September. It was followed by Marathon Partners with a $32.9 million position. Other investors bullish on the company included Balyasny Asset Management, Two Sigma Advisors, and 683 Capital Partners. In terms of the portfolio weights assigned to each position Marathon Partners allocated the biggest weight to GrubHub Inc (NYSE:GRUB), around 20.61% of its 13F portfolio. Brightlight Capital is also relatively very bullish on the stock, earmarking 8.72 percent of its 13F equity portfolio to GRUB.
Seeing as GrubHub Inc (NYSE:GRUB) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few fund managers that slashed their full holdings in the first quarter. Intriguingly, Ross Turner’s Pelham Capital dropped the largest investment of the 750 funds tracked by Insider Monkey, totaling about $103.9 million in stock. Alex Snow’s fund, Lansdowne Partners, also dumped its stock, about $73.7 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 1 funds in the first quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as GrubHub Inc (NYSE:GRUB) but similarly valued. These stocks are Clearway Energy, Inc. (NYSE:CWEN), Nomad Foods Limited (NYSE:NOMD), Exponent, Inc. (NASDAQ:EXPO), and Skechers USA Inc (NYSE:SKX). All of these stocks’ market caps match GRUB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CWEN | 17 | 169906 | -6 |
| NOMD | 34 | 444046 | -1 |
| EXPO | 17 | 121456 | 0 |
| SKX | 26 | 485573 | -4 |
| Average | 23.5 | 305245 | -2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.5 hedge funds with bullish positions and the average amount invested in these stocks was $305 million. That figure was $373 million in GRUB’s case. Nomad Foods Limited (NYSE:NOMD) is the most popular stock in this table. On the other hand Clearway Energy, Inc. (NYSE:CWEN) is the least popular one with only 17 bullish hedge fund positions. GrubHub Inc (NYSE:GRUB) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on GRUB as the stock returned 39.3% in Q2 (through the end of May) 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.
