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 The RealReal, Inc. (NASDAQ:REAL) based on that data.
The RealReal, Inc. (NASDAQ:REAL) has experienced a decrease in support from the world’s most elite money managers lately. The RealReal, Inc. (NASDAQ:REAL) was in 21 hedge funds’ portfolios at the end of September. The all time high for this statistic is 33. There were 26 hedge funds in our database with REAL holdings at the end of June. Our calculations also showed that REAL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Sander Gerber of Hudson Bay Capital
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. With all of this in mind we’re going to go over the recent hedge fund action encompassing The RealReal, Inc. (NASDAQ:REAL).
Do Hedge Funds Think REAL Is A Good Stock To Buy Now?
At third quarter’s end, a total of 21 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 REAL over the last 25 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Bill Miller’s Miller Value Partners has the biggest position in The RealReal, Inc. (NASDAQ:REAL), worth close to $52.1 million, comprising 1.2% of its total 13F portfolio. The second most bullish fund manager is Citadel Investment Group, managed by Ken Griffin, which holds a $26.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions encompass Israel Englander’s Millennium Management, Ricky Sandler’s Eminence Capital and James Crichton’s Hitchwood Capital Management. In terms of the portfolio weights assigned to each position Miller Value Partners allocated the biggest weight to The RealReal, Inc. (NASDAQ:REAL), around 1.21% of its 13F portfolio. MIK Capital is also relatively very bullish on the stock, earmarking 1.07 percent of its 13F equity portfolio to REAL.
Seeing as The RealReal, Inc. (NASDAQ:REAL) has witnessed bearish sentiment from hedge fund managers, we can see that there were a few hedge funds that slashed their full holdings by the end of the third quarter. Intriguingly, Hyder Ahmad’s Broad Peak Investment Holdings dropped the biggest stake of the “upper crust” of funds monitored by Insider Monkey, worth close to $41.4 million in stock. Kevin Mok’s fund, Hidden Lake Asset Management, also sold off its stock, about $17.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 5 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as The RealReal, Inc. (NASDAQ:REAL) but similarly valued. These stocks are Blink Charging Co. (NASDAQ:BLNK), Schnitzer Steel Industries, Inc. (NASDAQ:SCHN), Triumph Group Inc (NYSE:TGI), Standex International Corp. (NYSE:SXI), Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT), BlackSky Technology Inc. (NYSE:BKSY), and Model N Inc (NYSE:MODN). This group of stocks’ market valuations are similar to REAL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BLNK | 6 | 4373 | -1 |
| SCHN | 11 | 12559 | -7 |
| TGI | 24 | 188113 | 2 |
| SXI | 13 | 65942 | 3 |
| ARQT | 12 | 470874 | -1 |
| BKSY | 21 | 159362 | 21 |
| MODN | 13 | 80725 | 0 |
| Average | 14.3 | 140278 | 2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.3 hedge funds with bullish positions and the average amount invested in these stocks was $140 million. That figure was $169 million in REAL’s case. Triumph Group Inc (NYSE:TGI) is the most popular stock in this table. On the other hand Blink Charging Co. (NASDAQ:BLNK) is the least popular one with only 6 bullish hedge fund positions. The RealReal, Inc. (NASDAQ:REAL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for REAL is 60.8. 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately REAL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on REAL were disappointed as the stock returned -11.9% since the end of September (through 12/31) 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.
Follow Therealreal Inc. (NASDAQ:REAL)
Follow Therealreal Inc. (NASDAQ:REAL)
Suggested Articles:
- 10 Best Stocks to Buy According to Chris James’ Engine No. 1
- Billionaire Carl Icahn’s Top 10 Picks
- 10 Best Bank Stocks To Buy Now
Disclosure: None. This article was originally published at Insider Monkey.
