The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity 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 March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Pinterest, Inc. (NYSE:PINS) based on those filings.
Is Pinterest, Inc. (NYSE:PINS) an excellent investment now? Money managers are in a bullish mood. The number of bullish hedge fund bets rose by 1 recently. Our calculations also showed that PINS 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.
At the moment there are a multitude of gauges shareholders use to value publicly traded companies. Two of the most underrated gauges are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the S&P 500 by a superb amount (see the details here).
Ricky Sandler of Eminence Capital
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. With all of this in mind we’re going to take a peek at the latest hedge fund action encompassing Pinterest, Inc. (NYSE:PINS).
Hedge fund activity in Pinterest, Inc. (NYSE:PINS)
At Q1’s end, a total of 38 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the fourth quarter of 2019. By comparison, 0 hedge funds held shares or bullish call options in PINS 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.
Among these funds, Eminence Capital held the most valuable stake in Pinterest, Inc. (NYSE:PINS), which was worth $123.2 million at the end of the third quarter. On the second spot was Polar Capital which amassed $58.5 million worth of shares. SQN Investors, SRS Investment Management, and General Equity Partners 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 Nishkama Capital allocated the biggest weight to Pinterest, Inc. (NYSE:PINS), around 13.18% of its 13F portfolio. General Equity Partners is also relatively very bullish on the stock, setting aside 11.19 percent of its 13F equity portfolio to PINS.
As aggregate interest increased, some big names were leading the bulls’ herd. SRS Investment Management, managed by Karthik Sarma, created the largest position in Pinterest, Inc. (NYSE:PINS). SRS Investment Management had $25.7 million invested in the company at the end of the quarter. Andrew Bellas’s General Equity Partners also initiated a $17.1 million position during the quarter. The other funds with new positions in the stock are Clint Carlson’s Carlson Capital, Seth Wunder’s Black-and-White Capital, and Josh Donfeld and David Rogers’s Castle Hook Partners.
Let’s now take a look at hedge fund activity in other stocks similar to Pinterest, Inc. (NYSE:PINS). We will take a look at GDS Holdings Limited (NASDAQ:GDS), CarMax Inc (NYSE:KMX), Raymond James Financial, Inc. (NYSE:RJF), and The Trade Desk, Inc. (NASDAQ:TTD). This group of stocks’ market valuations are closest to PINS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GDS | 41 | 1618404 | 7 |
| KMX | 37 | 1084332 | -13 |
| RJF | 31 | 441370 | 3 |
| TTD | 25 | 393525 | 1 |
| Average | 33.5 | 884408 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.5 hedge funds with bullish positions and the average amount invested in these stocks was $884 million. That figure was $410 million in PINS’s case. GDS Holdings Limited (NASDAQ:GDS) is the most popular stock in this table. On the other hand The Trade Desk, Inc. (NASDAQ:TTD) is the least popular one with only 25 bullish hedge fund positions. Pinterest, Inc. (NYSE:PINS) is not the most popular stock in this group but hedge fund interest is still above average. 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 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on PINS as the stock returned 31.4% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
