The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Square, Inc. (NYSE:SQ).
Square, Inc. (NYSE:SQ) shareholders have witnessed an increase in enthusiasm from smart money of late. Square, Inc. (NYSE:SQ) was in 98 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 94. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 94 hedge funds in our database with SQ holdings at the end of June. Our calculations also showed that SQ ranked 18th among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind let’s take a look at the new hedge fund action regarding Square, Inc. (NYSE:SQ).
Cathie Wood of ARK Investment Management
Do Hedge Funds Think SQ Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 98 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SQ over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Square, Inc. (NYSE:SQ) was held by ARK Investment Management, which reported holding $1467.9 million worth of stock at the end of September. It was followed by Lone Pine Capital with a $1290.5 million position. Other investors bullish on the company included Bares Capital Management, Citadel Investment Group, and Coatue Management. In terms of the portfolio weights assigned to each position Kuvari Partners allocated the biggest weight to Square, Inc. (NYSE:SQ), around 29.69% of its 13F portfolio. Bares Capital Management is also relatively very bullish on the stock, earmarking 18.87 percent of its 13F equity portfolio to SQ.
Now, specific money managers have jumped into Square, Inc. (NYSE:SQ) headfirst. Melvin Capital Management, managed by Gabriel Plotkin, created the biggest position in Square, Inc. (NYSE:SQ). Melvin Capital Management had $311.8 million invested in the company at the end of the quarter. Robert Pohly’s Samlyn Capital also initiated a $136.8 million position during the quarter. The other funds with brand new SQ positions are Panayotis Takis Sparaggis’s Alkeon Capital Management, John Armitage’s Egerton Capital Limited, and Aaron Cowen’s Suvretta Capital Management.
Let’s now review hedge fund activity in other stocks similar to Square, Inc. (NYSE:SQ). We will take a look at The Estee Lauder Companies Inc (NYSE:EL), Rio Tinto Group (NYSE:RIO), HSBC Holdings plc (NYSE:HSBC), Caterpillar Inc. (NYSE:CAT), Deere & Company (NYSE:DE), S&P Global Inc. (NYSE:SPGI), and 3M Company (NYSE:MMM). This group of stocks’ market valuations are similar to SQ’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EL | 49 | 4137243 | -1 |
| RIO | 20 | 1330364 | -1 |
| HSBC | 10 | 196426 | -1 |
| CAT | 46 | 4778511 | -16 |
| DE | 54 | 2530736 | 2 |
| SPGI | 78 | 7036868 | 7 |
| MMM | 46 | 1624838 | 4 |
| Average | 43.3 | 3090712 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 43.3 hedge funds with bullish positions and the average amount invested in these stocks was $3091 million. That figure was $8885 million in SQ’s case. S&P Global Inc. (NYSE:SPGI) is the most popular stock in this table. On the other hand HSBC Holdings plc (NYSE:HSBC) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Square, Inc. (NYSE:SQ) is more popular among hedge funds. Our overall hedge fund sentiment score for SQ is 91.5. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately SQ wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SQ were disappointed as the stock returned -13.1% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
