Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Stitch Fix, Inc. (NASDAQ:SFIX), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Stitch Fix, Inc. (NASDAQ:SFIX) was in 28 hedge funds’ portfolios at the end of the second quarter of 2019. SFIX has experienced an increase in hedge fund interest in recent months. There were 27 hedge funds in our database with SFIX positions at the end of the previous quarter. Our calculations also showed that SFIX isn’t among the 30 most popular stocks among hedge funds (view the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most investors, hedge funds are assumed to be unimportant, outdated investment tools of the past. While there are more than 8000 funds trading at present, Our researchers hone in on the aristocrats of this club, approximately 750 funds. These hedge fund managers orchestrate the majority of the smart money’s total capital, and by paying attention to their finest equity investments, Insider Monkey has determined a number of investment strategies that have historically outperformed Mr. Market. Insider Monkey’s flagship hedge fund strategy beat the S&P 500 index by around 5 percentage points per annum since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a look at the latest hedge fund action regarding Stitch Fix, Inc. (NASDAQ:SFIX).
How have hedgies been trading Stitch Fix, Inc. (NASDAQ:SFIX)?
At Q2’s end, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the first quarter of 2019. On the other hand, there were a total of 20 hedge funds with a bullish position in SFIX a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Robert Pitts’s Steadfast Capital Management has the biggest position in Stitch Fix, Inc. (NASDAQ:SFIX), worth close to $71.5 million, accounting for 1% of its total 13F portfolio. Sitting at the No. 2 spot is Park West Asset Management, led by Peter S. Park, holding a $30.4 million position; 1.3% of its 13F portfolio is allocated to the stock. Some other members of the smart money that hold long positions encompass Bill Miller’s Miller Value Partners, James Woodson Davis’s Woodson Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Miller Value Partners, managed by Bill Miller, created the most valuable position in Stitch Fix, Inc. (NASDAQ:SFIX). Miller Value Partners had $28 million invested in the company at the end of the quarter. James Woodson Davis’s Woodson Capital Management also initiated a $25.9 million position during the quarter. The following funds were also among the new SFIX investors: Bijan Modanlou, Joseph Bou-Saba, and Jayaveera Kodali’s Alta Park Capital, Principal Global Investors’s Columbus Circle Investors, and Dipak Patel’s Alight Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Stitch Fix, Inc. (NASDAQ:SFIX) but similarly valued. These stocks are Fox Factory Holding Corp (NASDAQ:FOXF), The Descartes Systems Group Inc (NASDAQ:DSGX), Black Stone Minerals LP (NYSE:BSM), and Neogen Corporation (NASDAQ:NEOG). This group of stocks’ market values match SFIX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FOXF | 11 | 28084 | -3 |
| DSGX | 11 | 121216 | 1 |
| BSM | 7 | 11439 | 2 |
| NEOG | 12 | 28955 | 0 |
| Average | 10.25 | 47424 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $262 million in SFIX’s case. Neogen Corporation (NASDAQ:NEOG) is the most popular stock in this table. On the other hand Black Stone Minerals LP (NYSE:BSM) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Stitch Fix, Inc. (NASDAQ:SFIX) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately SFIX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SFIX were disappointed as the stock returned -39.8% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3.
Disclosure: None. This article was originally published at Insider Monkey.
