We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Match Group, Inc. (NASDAQ:MTCH) based on that data.
Is Match Group, Inc. (NASDAQ:MTCH) the right pick for your portfolio? The smart money is becoming more confident. The number of bullish hedge fund positions improved by 6 in recent months. Our calculations also showed that MTCH 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). MTCH was in 38 hedge funds’ portfolios at the end of March. There were 32 hedge funds in our database with MTCH holdings at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most market participants, hedge funds are perceived as underperforming, outdated investment vehicles of the past. While there are over 8000 funds trading at present, Our researchers look at the bigwigs of this group, approximately 850 funds. It is estimated that this group of investors have their hands on the lion’s share of all hedge funds’ total capital, and by tracking their top stock picks, Insider Monkey has revealed many investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
John Armitage of Egerton Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities 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. With all of this in mind let’s view the recent hedge fund action regarding Match Group, Inc. (NASDAQ:MTCH).
How are hedge funds trading Match Group, Inc. (NASDAQ:MTCH)?
Heading into the second quarter of 2020, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from the previous quarter. The graph below displays the number of hedge funds with bullish position in MTCH over the last 18 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
Among these funds, Lone Pine Capital held the most valuable stake in Match Group, Inc. (NASDAQ:MTCH), which was worth $452.1 million at the end of the third quarter. On the second spot was Egerton Capital Limited which amassed $170.3 million worth of shares. Antara Capital, SRS Investment Management, and Light Street 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 Portsea Asset Management allocated the biggest weight to Match Group, Inc. (NASDAQ:MTCH), around 27.11% of its 13F portfolio. Axel Capital Management is also relatively very bullish on the stock, earmarking 4.91 percent of its 13F equity portfolio to MTCH.
As industrywide interest jumped, key money managers have been driving this bullishness. SRS Investment Management, managed by Karthik Sarma, established the biggest position in Match Group, Inc. (NASDAQ:MTCH). SRS Investment Management had $81 million invested in the company at the end of the quarter. Cyrus de Weck’s Portsea Asset Management also initiated a $30.1 million position during the quarter. The other funds with new positions in the stock are Robert Pitts’s Steadfast Capital Management, John Smith Clark’s Southpoint Capital Advisors, and Keith Meister’s Corvex Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Match Group, Inc. (NASDAQ:MTCH) but similarly valued. These stocks are Fortive Corporation (NYSE:FTV), Cadence Design Systems Inc (NASDAQ:CDNS), Valero Energy Corporation (NYSE:VLO), and RingCentral Inc (NYSE:RNG). All of these stocks’ market caps are similar to MTCH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FTV | 35 | 1015089 | -8 |
| CDNS | 31 | 1339958 | -11 |
| VLO | 45 | 275743 | -1 |
| RNG | 67 | 2827940 | 5 |
| Average | 44.5 | 1364683 | -3.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 44.5 hedge funds with bullish positions and the average amount invested in these stocks was $1365 million. That figure was $1033 million in MTCH’s case. RingCentral Inc (NYSE:RNG) is the most popular stock in this table. On the other hand Cadence Design Systems Inc (NASDAQ:CDNS) is the least popular one with only 31 bullish hedge fund positions. Match Group, Inc. (NASDAQ:MTCH) is not the least popular stock in this group but hedge fund interest is still below 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 and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on MTCH as the stock returned 34.8% during the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
