Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of WisdomTree Investments, Inc. (NASDAQ:WETF).
Is WisdomTree Investments, Inc. (NASDAQ:WETF) the right investment to pursue these days? Investors who are in the know are in a bullish mood. The number of long hedge fund bets advanced by 3 lately. Our calculations also showed that WETF 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.
To the average investor there are plenty of indicators shareholders put to use to grade their stock investments. A duo of the most useful indicators are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the best fund managers can outperform the S&P 500 by a significant margin (see the details here).
Steven Cohen of Point72 Asset Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. 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 review the recent hedge fund action regarding WisdomTree Investments, Inc. (NASDAQ:WETF).
What have hedge funds been doing with WisdomTree Investments, Inc. (NASDAQ:WETF)?
At Q1’s end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards WETF over the last 18 quarters. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of WisdomTree Investments, Inc. (NASDAQ:WETF), with a stake worth $9.2 million reported as of the end of September. Trailing Renaissance Technologies was Simcoe Capital Management, which amassed a stake valued at $8.3 million. Citadel Investment Group, Millennium Management, and Marshall Wace LLP 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 Simcoe Capital Management allocated the biggest weight to WisdomTree Investments, Inc. (NASDAQ:WETF), around 2.55% of its 13F portfolio. BlueMar Capital Management is also relatively very bullish on the stock, setting aside 0.37 percent of its 13F equity portfolio to WETF.
As industrywide interest jumped, key money managers were leading the bulls’ herd. Simcoe Capital Management, managed by Jeffrey Jacobowitz, initiated the most outsized position in WisdomTree Investments, Inc. (NASDAQ:WETF). Simcoe Capital Management had $8.3 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $2.3 million position during the quarter. The other funds with brand new WETF positions are Claes Fornell’s CSat Investment Advisory, Gregg Moskowitz’s Interval Partners, and Greg Eisner’s Engineers Gate Manager.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as WisdomTree Investments, Inc. (NASDAQ:WETF) but similarly valued. These stocks are Kosmos Energy Ltd (NYSE:KOS), Scholar Rock Holding Corporation (NASDAQ:SRRK), Replimune Group, Inc. (NASDAQ:REPL), and Clearwater Paper Corp (NYSE:CLW). This group of stocks’ market values are closest to WETF’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KOS | 21 | 28495 | -9 |
| SRRK | 5 | 40575 | -2 |
| REPL | 8 | 58138 | -1 |
| CLW | 5 | 22727 | -1 |
| Average | 9.75 | 37484 | -3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $38 million in WETF’s case. Kosmos Energy Ltd (NYSE:KOS) is the most popular stock in this table. On the other hand Scholar Rock Holding Corporation (NASDAQ:SRRK) is the least popular one with only 5 bullish hedge fund positions. WisdomTree Investments, Inc. (NASDAQ:WETF) 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 12.2% in 2020 through June 17th but still beat the market by 14.8 percentage points. Hedge funds were also right about betting on WETF as the stock returned 56.9% in Q2 (through June 17th) 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.
