Is Victorias Secret & Co. (NYSE:VSCO) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Victorias Secret & Co. (NYSE:VSCO) ready to rally soon? Prominent investors were taking an optimistic view. The number of long hedge fund bets stood at 37 in recent months. Victorias Secret & Co. (NYSE:VSCO) was in 37 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that VSCO 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. Keeping this in mind we’re going to analyze the key hedge fund action surrounding Victorias Secret & Co. (NYSE:VSCO).
John Armitage of Egerton Capital
Do Hedge Funds Think VSCO Is A Good Stock To Buy Now?
At third quarter’s end, a total of 37 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 37 from the previous quarter. Below, you can check out the change in hedge fund sentiment towards VSCO over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Lone Pine Capital has the largest position in Victorias Secret & Co. (NYSE:VSCO) , worth close to $475.8 million, corresponding to 1.6% of its total 13F portfolio. Coming in second is Snehal Amin of Windacre Partnership, with a $342 million position; the fund has 7.6% of its 13F portfolio invested in the stock. Other peers with similar optimism encompass Jack Woodruff’s Candlestick Capital Management, John Armitage’s Egerton Capital Limited and Gabriel Plotkin’s Melvin Capital Management. In terms of the portfolio weights assigned to each position Barington Capital Group allocated the biggest weight to Victorias Secret & Co. (NYSE:VSCO) , around 9.57% of its 13F portfolio. Parsifal Capital Management is also relatively very bullish on the stock, designating 8.2 percent of its 13F equity portfolio to VSCO.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Lone Pine Capital, initiated the biggest position in Victorias Secret & Co. (NYSE:VSCO) . Lone Pine Capital had $475.8 million invested in the company at the end of the quarter. Snehal Amin’s Windacre Partnership also made a $342 million investment in the stock during the quarter. The other funds with brand new VSCO positions are Jack Woodruff’s Candlestick Capital Management, John Armitage’s Egerton Capital Limited, and Gabriel Plotkin’s Melvin Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Victorias Secret & Co. (NYSE:VSCO) but similarly valued. We will take a look at Wingstop Inc (NASDAQ:WING), Nomad Foods Limited (NYSE:NOMD), Select Medical Holdings Corporation (NYSE:SEM), Amedisys Inc (NASDAQ:AMED), JetBlue Airways Corporation (NASDAQ:JBLU), Herc Holdings Inc. (NYSE:HRI), and The Howard Hughes Corporation (NYSE:HHC). This group of stocks’ market values match VSCO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WING | 23 | 213008 | -1 |
| NOMD | 23 | 272138 | -3 |
| SEM | 22 | 228726 | -2 |
| AMED | 25 | 271359 | -1 |
| JBLU | 31 | 370640 | 1 |
| HRI | 24 | 1535284 | 4 |
| HHC | 25 | 1469334 | 0 |
| Average | 24.7 | 622927 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.7 hedge funds with bullish positions and the average amount invested in these stocks was $623 million. That figure was $1962 million in VSCO’s case. JetBlue Airways Corporation (NASDAQ:JBLU) is the most popular stock in this table. On the other hand Select Medical Holdings Corporation (NYSE:SEM) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Victorias Secret & Co. (NYSE:VSCO) is more popular among hedge funds. Our overall hedge fund sentiment score for VSCO is 90. 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 VSCO wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on VSCO were disappointed as the stock returned -1.8% 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.
