The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Yelp Inc (NYSE:YELP).
Is Yelp Inc (NYSE:YELP) ready to rally soon? Investors who are in the know were becoming less confident. The number of bullish hedge fund bets were trimmed by 1 lately. Yelp Inc (NYSE:YELP) was in 26 hedge funds’ portfolios at the end of September. The all time high for this statistic is 45. Our calculations also showed that YELP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 27 hedge funds in our database with YELP positions at the end of the second quarter.
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. Now we’re going to take a look at the latest hedge fund action surrounding Yelp Inc (NYSE:YELP).
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
Do Hedge Funds Think YELP Is A Good Stock To Buy Now?
At the end of September, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from one quarter earlier. On the other hand, there were a total of 27 hedge funds with a bullish position in YELP 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 Yelp Inc (NYSE:YELP) was held by Fisher Asset Management, which reported holding $133.1 million worth of stock at the end of September. It was followed by D E Shaw with a $98.7 million position. Other investors bullish on the company included Tenzing Global Investors, AQR Capital Management, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Tenzing Global Investors allocated the biggest weight to Yelp Inc (NYSE:YELP), around 19.82% of its 13F portfolio. Goodnow Investment Group is also relatively very bullish on the stock, dishing out 1.95 percent of its 13F equity portfolio to YELP.
Because Yelp Inc (NYSE:YELP) has experienced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there was a specific group of fund managers who were dropping their positions entirely by the end of the third quarter. Interestingly, Joseph Samuels’s Islet Management dumped the largest stake of the 750 funds tracked by Insider Monkey, valued at about $21.3 million in call options. Gilchrist Berg’s fund, Water Street Capital, also said goodbye to its call options, about $12 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 1 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Yelp Inc (NYSE:YELP). These stocks are American Equity Investment Life Holding Company (NYSE:AEL), United Natural Foods, Inc. (NYSE:UNFI), Columbia Banking System Inc (NASDAQ:COLB), Avista Corp (NYSE:AVA), Cortexyme, Inc. (NASDAQ:CRTX), Agios Pharmaceuticals Inc (NASDAQ:AGIO), and Worthington Industries, Inc. (NYSE:WOR). All of these stocks’ market caps resemble YELP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AEL | 20 | 170592 | 0 |
| UNFI | 19 | 92199 | 4 |
| COLB | 13 | 151306 | 1 |
| AVA | 14 | 42162 | -3 |
| CRTX | 10 | 22939 | 1 |
| AGIO | 16 | 339047 | -3 |
| WOR | 14 | 34583 | -1 |
| Average | 15.1 | 121833 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.1 hedge funds with bullish positions and the average amount invested in these stocks was $122 million. That figure was $535 million in YELP’s case. American Equity Investment Life Holding Company (NYSE:AEL) is the most popular stock in this table. On the other hand Cortexyme, Inc. (NASDAQ:CRTX) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Yelp Inc (NYSE:YELP) is more popular among hedge funds. Our overall hedge fund sentiment score for YELP is 71.3. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Unfortunately YELP wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on YELP were disappointed as the stock returned -1.9% since the end of the third quarter (through 12/9) 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.
