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 September 30th. We at Insider Monkey have made an extensive database of more than 867 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Cardlytics, Inc. (NASDAQ:CDLX) based on those filings.
Is Cardlytics, Inc. (NASDAQ:CDLX) a healthy stock for your portfolio? Investors who are in the know were reducing their bets on the stock. The number of bullish hedge fund positions retreated by 6 lately. Cardlytics, Inc. (NASDAQ:CDLX) was in 23 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 38. Our calculations also showed that CDLX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Peter Algert of Algert Global
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 let’s take a gander at the new hedge fund action regarding Cardlytics, Inc. (NASDAQ:CDLX).
Do Hedge Funds Think CDLX Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -21% from the previous quarter. On the other hand, there were a total of 29 hedge funds with a bullish position in CDLX a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, CAS Investment Partners was the largest shareholder of Cardlytics, Inc. (NASDAQ:CDLX), with a stake worth $432.3 million reported as of the end of September. Trailing CAS Investment Partners was 683 Capital Partners, which amassed a stake valued at $123 million. Alua Capital Management, Antipodean Advisors, and Brightlight 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 CAS Investment Partners allocated the biggest weight to Cardlytics, Inc. (NASDAQ:CDLX), around 20.6% of its 13F portfolio. Antipodean Advisors is also relatively very bullish on the stock, designating 15.18 percent of its 13F equity portfolio to CDLX.
Due to the fact that Cardlytics, Inc. (NASDAQ:CDLX) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of hedge funds that slashed their entire stakes in the third quarter. At the top of the heap, Richard Driehaus’s Driehaus Capital cut the largest position of the “upper crust” of funds followed by Insider Monkey, valued at close to $25.7 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also said goodbye to its stock, about $15.9 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 6 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Cardlytics, Inc. (NASDAQ:CDLX) but similarly valued. We will take a look at ACV Auctions Inc. (NASDAQ:ACVA), Retail Properties of America Inc (NYSE:RPAI), Cannae Holdings, Inc. (NYSE:CNNE), United States Cellular Corporation (NYSE:USM), Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS), GrafTech International Ltd. (NYSE:EAF), and CVB Financial Corp. (NASDAQ:CVBF). All of these stocks’ market caps resemble CDLX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ACVA | 22 | 230648 | 0 |
| RPAI | 11 | 61780 | -5 |
| CNNE | 35 | 446118 | 1 |
| USM | 9 | 72313 | 1 |
| KTOS | 15 | 232817 | -3 |
| EAF | 31 | 247108 | -5 |
| CVBF | 18 | 50453 | 5 |
| Average | 20.1 | 191605 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.1 hedge funds with bullish positions and the average amount invested in these stocks was $192 million. That figure was $830 million in CDLX’s case. Cannae Holdings, Inc. (NYSE:CNNE) is the most popular stock in this table. On the other hand United States Cellular Corporation (NYSE:USM) is the least popular one with only 9 bullish hedge fund positions. Cardlytics, Inc. (NASDAQ:CDLX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CDLX is 44.1. 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately CDLX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CDLX were disappointed as the stock returned -16.1% since the end of September (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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
