The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Farfetch Limited (NYSE:FTCH).
Farfetch Limited (NYSE:FTCH) investors should be aware of a decrease in activity from the world’s largest hedge funds of late. Our calculations also showed that FTCH isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To most shareholders, hedge funds are seen as underperforming, old investment vehicles of years past. While there are more than 8000 funds trading today, Our experts hone in on the leaders of this group, around 850 funds. It is estimated that this group of investors oversee bulk of all hedge funds’ total asset base, and by keeping track of their finest equity investments, Insider Monkey has revealed a number of investment strategies that have historically outperformed Mr. Market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Bill Miller of Miller Value Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a look at the latest hedge fund action surrounding Farfetch Limited (NYSE:FTCH).
What does smart money think about Farfetch Limited (NYSE:FTCH)?
At Q1’s end, a total of 22 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 FTCH over the last 18 quarters. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Eashwar Krishnan’s Tybourne Capital Management has the most valuable position in Farfetch Limited (NYSE:FTCH), worth close to $126.1 million, comprising 4.6% of its total 13F portfolio. On Tybourne Capital Management’s heels is Brett Barakett of Tremblant Capital, with a $105.5 million position; the fund has 6.6% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions consist of Bill Miller’s Miller Value Partners, Brad Gerstner’s Altimeter Capital Management and Fang Zheng’s Keywise Capital Management. In terms of the portfolio weights assigned to each position Keywise Capital Management allocated the biggest weight to Farfetch Limited (NYSE:FTCH), around 7.63% of its 13F portfolio. Tremblant Capital is also relatively very bullish on the stock, setting aside 6.64 percent of its 13F equity portfolio to FTCH.
Since Farfetch Limited (NYSE:FTCH) has witnessed falling interest from hedge fund managers, we can see that there was a specific group of hedge funds that elected to cut their positions entirely last quarter. It’s worth mentioning that Israel Englander’s Millennium Management dumped the biggest position of all the hedgies followed by Insider Monkey, comprising about $8.3 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also dropped its stock, about $5.1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 5 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Farfetch Limited (NYSE:FTCH). We will take a look at Spirit Realty Capital Inc (NYSE:SRC), Medallia, Inc. (NYSE:MDLA), PVH Corp (NYSE:PVH), and Cannae Holdings, Inc. (NYSE:CNNE). This group of stocks’ market values are similar to FTCH’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SRC | 18 | 76385 | -8 |
| MDLA | 20 | 237596 | -2 |
| PVH | 18 | 346896 | -11 |
| CNNE | 20 | 240727 | -11 |
| Average | 19 | 225401 | -8 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $225 million. That figure was $401 million in FTCH’s case. Medallia, Inc. (NYSE:MDLA) is the most popular stock in this table. On the other hand Spirit Realty Capital Inc (NYSE:SRC) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Farfetch Limited (NYSE:FTCH) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 13.9% in 2020 through June 10th but still managed to beat the market by 14.2 percentage points. Hedge funds were also right about betting on FTCH as the stock returned 95.1% so far in Q2 (through June 10th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
