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. Insider Monkey finished processing 866 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards ACV Auctions Inc. (NASDAQ:ACVA).
Is ACV Auctions Inc. (NASDAQ:ACVA) a buy here? Investors who are in the know were in a bullish mood. The number of long hedge fund bets increased by 25 in recent months. ACV Auctions Inc. (NASDAQ:ACVA) was in 25 hedge funds’ portfolios at the end of March. Our calculations also showed that ACVA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
To most investors, hedge funds are viewed as unimportant, outdated investment tools of the past. While there are greater than 8000 funds in operation at the moment, Our experts hone in on the aristocrats of this club, about 850 funds. These hedge fund managers direct most of the hedge fund industry’s total asset base, and by paying attention to their finest picks, Insider Monkey has identified several investment strategies that have historically beaten the broader indices. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Alex Sacerdote of Whale Rock Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a gander at the recent hedge fund action surrounding ACV Auctions Inc. (NASDAQ:ACVA).
Do Hedge Funds Think ACVA Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25 from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in ACVA a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Atreides Management was the largest shareholder of ACV Auctions Inc. (NASDAQ:ACVA), with a stake worth $32.9 million reported as of the end of March. Trailing Atreides Management was Melvin Capital Management, which amassed a stake valued at $24.2 million. Adage Capital Management, Whale Rock Capital Management, and ThornTree Capital Partners 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 ThornTree Capital Partners allocated the biggest weight to ACV Auctions Inc. (NASDAQ:ACVA), around 1.12% of its 13F portfolio. Pinz Capital is also relatively very bullish on the stock, designating 0.9 percent of its 13F equity portfolio to ACVA.
Consequently, some big names have been driving this bullishness. Atreides Management, managed by Gavin Baker, assembled the biggest position in ACV Auctions Inc. (NASDAQ:ACVA). Atreides Management had $32.9 million invested in the company at the end of the quarter. Gabriel Plotkin’s Melvin Capital Management also initiated a $24.2 million position during the quarter. The following funds were also among the new ACVA investors: Phill Gross and Robert Atchinson’s Adage Capital Management, Alex Sacerdote’s Whale Rock Capital Management, and Mark Moore’s ThornTree Capital Partners.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as ACV Auctions Inc. (NASDAQ:ACVA) but similarly valued. We will take a look at Grupo Aeroportuario del Sureste, S. A. B. de C. V. (NYSE:ASR), NOV Inc. (NYSE:NOV), Fox Factory Holding Corp (NASDAQ:FOXF), TIM S.A. (NYSE:TIMB), Inari Medical, Inc. (NASDAQ:NARI), Vroom, Inc. (NASDAQ:VRM), and Stitch Fix, Inc. (NASDAQ:SFIX). This group of stocks’ market values are similar to ACVA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ASR | 8 | 47384 | -2 |
| NOV | 29 | 898311 | 0 |
| FOXF | 14 | 106973 | -1 |
| TIMB | 12 | 100589 | 0 |
| NARI | 22 | 395636 | 4 |
| VRM | 21 | 345351 | -4 |
| SFIX | 28 | 465915 | -4 |
| Average | 19.1 | 337166 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.1 hedge funds with bullish positions and the average amount invested in these stocks was $337 million. That figure was $156 million in ACVA’s case. NOV Inc. (NYSE:NOV) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Sureste, S. A. B. de C. V. (NYSE:ASR) is the least popular one with only 8 bullish hedge fund positions. ACV Auctions Inc. (NASDAQ:ACVA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ACVA is 74.8. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 24% in 2021 through July 9th and beat the market again by 6.7 percentage points. Unfortunately ACVA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ACVA were disappointed as the stock returned -32.5% since the end of March (through 7/9) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
