The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Etsy Inc (NASDAQ:ETSY) based on those filings.
Etsy Inc (NASDAQ:ETSY) has seen a decrease in hedge fund sentiment recently. Etsy Inc (NASDAQ:ETSY) was in 53 hedge funds’ portfolios at the end of March. The all time high for this statistic is 56. There were 56 hedge funds in our database with ETSY holdings at the end of December. Our calculations also showed that ETSY isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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David Siegel of Two Sigma Advisors
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Do Hedge Funds Think ETSY Is A Good Stock To Buy Now?
At first quarter’s end, a total of 53 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from the previous quarter. On the other hand, there were a total of 38 hedge funds with a bullish position in ETSY a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Etsy Inc (NASDAQ:ETSY) was held by Renaissance Technologies, which reported holding $465.5 million worth of stock at the end of December. It was followed by Two Sigma Advisors with a $236.1 million position. Other investors bullish on the company included Citadel Investment Group, Goodnow Investment Group, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Goodnow Investment Group allocated the biggest weight to Etsy Inc (NASDAQ:ETSY), around 14.84% of its 13F portfolio. Stamina Capital Management is also relatively very bullish on the stock, designating 6.63 percent of its 13F equity portfolio to ETSY.
Because Etsy Inc (NASDAQ:ETSY) has experienced falling interest from hedge fund managers, logic holds that there lies a certain “tier” of funds who sold off their entire stakes in the first quarter. Interestingly, Mick Hellman’s HMI Capital dumped the largest stake of the 750 funds followed by Insider Monkey, totaling an estimated $132 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund sold off about $98 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds in the first quarter.
Let’s go over hedge fund activity in other stocks similar to Etsy Inc (NASDAQ:ETSY). We will take a look at Garmin Ltd. (NASDAQ:GRMN), Sirius XM Holdings Inc (NASDAQ:SIRI), Seagen Inc. (NASDAQ:SGEN), Telefonica S.A. (NYSE:TEF), Yum China Holdings, Inc. (NYSE:YUMC), Laboratory Corp. of America Holdings (NYSE:LH), and Occidental Petroleum Corporation (NYSE:OXY). This group of stocks’ market caps resemble ETSY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GRMN | 23 | 513329 | -4 |
| SIRI | 24 | 570460 | -8 |
| SGEN | 39 | 7467410 | 7 |
| TEF | 6 | 4834 | 1 |
| YUMC | 34 | 975839 | -5 |
| LH | 54 | 2476443 | -12 |
| OXY | 52 | 3418445 | 3 |
| Average | 33.1 | 2203823 | -2.6 |
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As you can see these stocks had an average of 33.1 hedge funds with bullish positions and the average amount invested in these stocks was $2204 million. That figure was $1645 million in ETSY’s case. Laboratory Corp. of America Holdings (NYSE:LH) is the most popular stock in this table. On the other hand Telefonica S.A. (NYSE:TEF) is the least popular one with only 6 bullish hedge fund positions. Etsy Inc (NASDAQ:ETSY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ETSY is 79.4. 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 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately ETSY wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ETSY were disappointed as the stock returned -17.8% since the end of March (through 6/11) 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.
