Hedge Funds Are Selling ironSource Ltd. (IS)

We at Insider Monkey have gone over 867 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 September 30th. In this article, we look at what those funds think of ironSource Ltd. (NYSE:IS) based on that data.

ironSource Ltd. (NYSE:IS) was in 29 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 52. IS shareholders have witnessed a decrease in hedge fund sentiment recently. There were 32 hedge funds in our database with IS positions at the end of the second quarter. Our calculations also showed that IS 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 go over the fresh hedge fund action regarding ironSource Ltd. (NYSE:IS).

Seth Klarman of Baupost Group

Do Hedge Funds Think IS Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in IS 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 ironSource Ltd. (NYSE:IS) was held by Tiger Global Management LLC, which reported holding $222.8 million worth of stock at the end of September. It was followed by Indaba Capital Management with a $100.5 million position. Other investors bullish on the company included Baupost Group, Maverick Capital, and Jericho Capital Asset Management. In terms of the portfolio weights assigned to each position Tao Capital allocated the biggest weight to ironSource Ltd. (NYSE:IS), around 10.73% of its 13F portfolio. Indaba Capital Management is also relatively very bullish on the stock, designating 10.65 percent of its 13F equity portfolio to IS.

Since ironSource Ltd. (NYSE:IS) has faced bearish sentiment from the smart money, logic holds that there lies a certain “tier” of funds that decided to sell off their full holdings in the third quarter. Intriguingly, Masayoshi Son’s SB Management said goodbye to the biggest position of the 750 funds monitored by Insider Monkey, totaling close to $52.5 million in stock, and Peter S. Park’s Park West Asset Management was right behind this move, as the fund said goodbye to about $20 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds in the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as ironSource Ltd. (NYSE:IS) but similarly valued. We will take a look at East West Bancorp, Inc. (NASDAQ:EWBC), Cable One Inc (NYSE:CABO), Lennox International Inc. (NYSE:LII), Formula One Group (NASDAQ:FWONA), Gaming and Leisure Properties Inc (NASDAQ:GLPI), Weibo Corp (NASDAQ:WB), and Five9 Inc (NASDAQ:FIVN). This group of stocks’ market caps resemble IS’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.1 hedge funds with bullish positions and the average amount invested in these stocks was $868 million. That figure was $727 million in IS’s case. Five9 Inc (NASDAQ:FIVN) is the most popular stock in this table. On the other hand Weibo Corp (NASDAQ:WB) is the least popular one with only 14 bullish hedge fund positions. ironSource Ltd. (NYSE:IS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IS is 30.8. 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 negative signal and 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 28.6% in 2021 through November 30th and surpassed the market again by 5.6 percentage points. Unfortunately IS wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); IS investors were disappointed as the stock returned -21.1% since the end of September (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 in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.