The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Meet Group Inc (NYSE:MEET) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Meet Group Inc (NYSE:MEET) shareholders have witnessed a decrease in enthusiasm from smart money in recent months. Meet Group Inc (NYSE:MEET) was in 19 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 21. Our calculations also showed that MEET isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
At the moment there are several formulas stock traders employ to size up stocks. A couple of the most underrated formulas are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can beat their index-focused peers by a healthy margin (see the details here).
Lee Ainslie of Maverick Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Now we’re going to view the key hedge fund action surrounding Meet Group Inc (NYSE:MEET).
What have hedge funds been doing with Meet Group Inc (NYSE:MEET)?
At the end of the second quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MEET over the last 20 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Magnetar Capital, managed by Alec Litowitz and Ross Laser, holds the biggest position in Meet Group Inc (NYSE:MEET). Magnetar Capital has a $19.7 million position in the stock, comprising 0.6% of its 13F portfolio. The second most bullish fund manager is Noam Gottesman of GLG Partners, with a $11.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions contain Michel Massoud’s Melqart Asset Management, Robert Emil Zoellner’s Alpine Associates and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Melqart Asset Management allocated the biggest weight to Meet Group Inc (NYSE:MEET), around 0.92% of its 13F portfolio. Magnetar Capital is also relatively very bullish on the stock, earmarking 0.58 percent of its 13F equity portfolio to MEET.
Because Meet Group Inc (NYSE:MEET) has faced bearish sentiment from hedge fund managers, we can see that there exists a select few money managers that decided to sell off their entire stakes by the end of the second quarter. Interestingly, Christian Leone’s Luxor Capital Group dumped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, totaling close to $25.9 million in stock. Matthew Mark’s fund, Jet Capital Investors, also dropped its stock, about $11.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds by the end of the second quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Meet Group Inc (NYSE:MEET) but similarly valued. We will take a look at AMC Entertainment Holdings Inc (NYSE:AMC), Enova International Inc (NYSE:ENVA), Clean Energy Fuels Corp (NASDAQ:CLNE), Arrow Financial Corporation (NASDAQ:AROW), Dorchester Minerals LP (NASDAQ:DMLP), Intersect ENT Inc (NASDAQ:XENT), and Yintech Investment Holdings Limited (NASDAQ:YIN). All of these stocks’ market caps resemble MEET’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMC | 8 | 1307 | -6 |
| ENVA | 21 | 87357 | 4 |
| CLNE | 11 | 23539 | 3 |
| AROW | 3 | 13185 | -1 |
| DMLP | 6 | 17949 | 0 |
| XENT | 17 | 80027 | -3 |
| YIN | 1 | 629 | 0 |
| Average | 9.6 | 31999 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.6 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $68 million in MEET’s case. Enova International Inc (NYSE:ENVA) is the most popular stock in this table. On the other hand Yintech Investment Holdings Limited (NASDAQ:YIN) is the least popular one with only 1 bullish hedge fund positions. Meet Group Inc (NYSE:MEET) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MEET is 75.1. 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 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 gained 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. Unfortunately MEET wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on MEET were disappointed as the stock returned -61.1% in Q3 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.