We can judge whether Ferrari N.V. (NYSE:RACE) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
Ferrari N.V. (NYSE:RACE) was in 32 hedge funds’ portfolios at the end of September. RACE investors should be aware of an increase in hedge fund interest recently. There were 30 hedge funds in our database with RACE positions at the end of the previous quarter. Our calculations also showed that RACE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most shareholders, hedge funds are seen as unimportant, old investment tools of years past. While there are greater than 8000 funds in operation at present, Our researchers choose to focus on the bigwigs of this group, approximately 750 funds. These investment experts shepherd most of all hedge funds’ total capital, and by tracking their inimitable equity investments, Insider Monkey has formulated many investment strategies that have historically outrun the broader indices. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Daniel Sundheim of D1 Capital Partners
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to check out the latest hedge fund action surrounding Ferrari N.V. (NYSE:RACE).
Hedge fund activity in Ferrari N.V. (NYSE:RACE)
Heading into the fourth quarter of 2019, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from one quarter earlier. By comparison, 26 hedge funds held shares or bullish call options in RACE 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.
More specifically, D1 Capital Partners was the largest shareholder of Ferrari N.V. (NYSE:RACE), with a stake worth $387 million reported as of the end of September. Trailing D1 Capital Partners was Melvin Capital Management, which amassed a stake valued at $311.3 million. Darsana Capital Partners, Alatus Capital, and Renaissance Technologies 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 Alatus Capital allocated the biggest weight to Ferrari N.V. (NYSE:RACE), around 45.34% of its portfolio. Aquamarine Capital Management is also relatively very bullish on the stock, dishing out 15.59 percent of its 13F equity portfolio to RACE.
As aggregate interest increased, key hedge funds have jumped into Ferrari N.V. (NYSE:RACE) headfirst. Renaissance Technologies established the biggest position in Ferrari N.V. (NYSE:RACE). Renaissance Technologies had $78 million invested in the company at the end of the quarter. Anthony Joseph Vaccarino’s North Fourth Asset Management also made a $9 million investment in the stock during the quarter. The following funds were also among the new RACE investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, David E. Shaw’s D E Shaw, and Richard Driehaus’s Driehaus Capital.
Let’s go over hedge fund activity in other stocks similar to Ferrari N.V. (NYSE:RACE). We will take a look at Keurig Dr Pepper Inc. (NYSE:KDP), FedEx Corporation (NYSE:FDX), National Grid plc (NYSE:NGG), and Dell Technologies Inc. (NYSE:DELL). This group of stocks’ market valuations are closest to RACE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KDP | 20 | 669516 | -1 |
| FDX | 40 | 1369398 | 0 |
| NGG | 10 | 534812 | 2 |
| DELL | 45 | 2444313 | 5 |
| Average | 28.75 | 1254510 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.75 hedge funds with bullish positions and the average amount invested in these stocks was $1255 million. That figure was $1531 million in RACE’s case. Dell Technologies Inc. (NYSE:DELL) is the most popular stock in this table. On the other hand National Grid plc (NYSE:NGG) is the least popular one with only 10 bullish hedge fund positions. Ferrari N.V. (NYSE:RACE) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on RACE, though not to the same extent, as the stock returned 9.2% during the first two months of the fourth quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
