Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Baidu, Inc. (NASDAQ:BIDU) changed recently.
Baidu, Inc. (NASDAQ:BIDU) shareholders have witnessed a decrease in hedge fund sentiment of late. Baidu, Inc. (NASDAQ:BIDU) was in 44 hedge funds’ portfolios at the end of September. The all time high for this statistic is 89. There were 59 hedge funds in our database with BIDU positions at the end of the second quarter. Our calculations also showed that BIDU isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
John Rogers of Ariel Investments
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 let’s view the latest hedge fund action regarding Baidu, Inc. (NASDAQ:BIDU).
Do Hedge Funds Think BIDU Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 44 of the hedge funds tracked by Insider Monkey were long this stock, a change of -25% from the previous quarter. On the other hand, there were a total of 43 hedge funds with a bullish position in BIDU 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 Baidu, Inc. (NASDAQ:BIDU) was held by Citadel Investment Group, which reported holding $507.1 million worth of stock at the end of September. It was followed by Ariel Investments with a $399.8 million position. Other investors bullish on the company included Two Sigma Advisors, Citadel Investment Group, and D E Shaw. In terms of the portfolio weights assigned to each position Oasis Management allocated the biggest weight to Baidu, Inc. (NASDAQ:BIDU), around 9.7% of its 13F portfolio. Keywise Capital Management is also relatively very bullish on the stock, dishing out 9.34 percent of its 13F equity portfolio to BIDU.
Due to the fact that Baidu, Inc. (NASDAQ:BIDU) has experienced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of hedgies that elected to cut their full holdings last quarter. Interestingly, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC sold off the largest investment of the “upper crust” of funds monitored by Insider Monkey, comprising close to $123.2 million in stock, and Bruce Kovner’s Caxton Associates LP was right behind this move, as the fund dumped about $85.2 million worth. These moves are interesting, as aggregate hedge fund interest fell by 15 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Baidu, Inc. (NASDAQ:BIDU) but similarly valued. These stocks are Honda Motor Co Ltd (NYSE:HMC), DexCom, Inc. (NASDAQ:DXCM), The Progressive Corporation (NYSE:PGR), Metlife Inc (NYSE:MET), IDEXX Laboratories, Inc. (NASDAQ:IDXX), Align Technology, Inc. (NASDAQ:ALGN), and Lululemon Athletica inc. (NASDAQ:LULU). This group of stocks’ market valuations match BIDU’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HMC | 12 | 338639 | 2 |
| DXCM | 53 | 1781583 | 4 |
| PGR | 47 | 1574950 | 3 |
| MET | 39 | 1145473 | -2 |
| IDXX | 43 | 3698749 | 4 |
| ALGN | 49 | 2262912 | -8 |
| LULU | 41 | 709432 | -5 |
| Average | 40.6 | 1644534 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 40.6 hedge funds with bullish positions and the average amount invested in these stocks was $1645 million. That figure was $2005 million in BIDU’s case. DexCom, Inc. (NASDAQ:DXCM) is the most popular stock in this table. On the other hand Honda Motor Co Ltd (NYSE:HMC) is the least popular one with only 12 bullish hedge fund positions. Baidu, Inc. (NASDAQ:BIDU) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BIDU is 43.9. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately BIDU wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BIDU were disappointed as the stock returned -2.5% 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 many of these stocks already outperformed the market since 2019.
Follow Baidu Inc (NASDAQ:BIDU)
Follow Baidu Inc (NASDAQ:BIDU)
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Disclosure: None. This article was originally published at Insider Monkey.
