In this article we will check out the progression of hedge fund sentiment towards YETI Holdings, Inc. (NYSE:YETI) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is YETI Holdings, Inc. (NYSE:YETI) a buy right now? The smart money was becoming more confident. The number of long hedge fund bets advanced by 11 in recent months. YETI Holdings, Inc. (NYSE:YETI) was in 30 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 29. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that YETI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 19 hedge funds in our database with YETI holdings at the end of December.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 homepage. Keeping this in mind let’s take a look at the recent hedge fund action regarding YETI Holdings, Inc. (NYSE:YETI).
Do Hedge Funds Think YETI Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 58% from the fourth quarter of 2020. By comparison, 20 hedge funds held shares or bullish call options in YETI a year ago. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of YETI Holdings, Inc. (NYSE:YETI), with a stake worth $31.9 million reported as of the end of March. Trailing Renaissance Technologies was Two Sigma Advisors, which amassed a stake valued at $28.5 million. Leonard Green & Partners, Citadel Investment Group, and Citadel Investment Group 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 0 allocated the biggest weight to YETI Holdings, Inc. (NYSE:YETI), around 4.94% of its 13F portfolio. 0 is also relatively very bullish on the stock, designating 4.38 percent of its 13F equity portfolio to YETI.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Leonard Green & Partners, managed by Leonard Green, assembled the most valuable call position in YETI Holdings, Inc. (NYSE:YETI). Leonard Green & Partners had $18.1 million invested in the company at the end of the quarter. Raymond J. Harbert’s Harbert Management also made a $10.5 million investment in the stock during the quarter. The other funds with brand new YETI positions are Jordan Moelis and Jeff Farroni’s Deep Field Asset Management, Dmitry Balyasny’s Balyasny Asset Management, and Leonard Green’s Leonard Green & Partners.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as YETI Holdings, Inc. (NYSE:YETI) but similarly valued. These stocks are BlackLine, Inc. (NASDAQ:BL), Terminix Global Holdings, Inc. (NYSE:TMX), Sana Biotechnology, Inc. (NASDAQ:SANA), BWX Technologies Inc (NYSE:BWXT), Reynolds Consumer Products Inc. (NASDAQ:REYN), Silicon Laboratories (NASDAQ:SLAB), and First American Financial Corp (NYSE:FAF). All of these stocks’ market caps are similar to YETI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BL | 24 | 271832 | 1 |
| TMX | 27 | 456007 | -3 |
| SANA | 15 | 158923 | 15 |
| BWXT | 16 | 154661 | -3 |
| REYN | 19 | 153098 | 1 |
| SLAB | 18 | 142253 | 0 |
| FAF | 32 | 964771 | -7 |
| Average | 21.6 | 328792 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.6 hedge funds with bullish positions and the average amount invested in these stocks was $329 million. That figure was $159 million in YETI’s case. First American Financial Corp (NYSE:FAF) is the most popular stock in this table. On the other hand Sana Biotechnology, Inc. (NASDAQ:SANA) is the least popular one with only 15 bullish hedge fund positions. YETI Holdings, Inc. (NYSE:YETI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for YETI is 84.1. 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. 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 22.8% in 2021 through July 2nd and still beat the market by 6 percentage points. Hedge funds were also right about betting on YETI as the stock returned 28.6% since the end of Q1 (through 7/2) 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.
