With the first-quarter round of 13F filings behind us, it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Yatra Online, Inc. (NASDAQ:YTRA).
Hedge fund interest in Yatra Online, Inc. (NASDAQ:YTRA) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article, we will also compare YTRA to other stocks including Delta Apparel, Inc. (NYSEAMEX:DLA), Inspired Entertainment, Inc. (NASDAQ:INSE), and Luna Innovations Incorporated (NASDAQ:LUNA) to get a better sense of its popularity.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David E. Shaw of D.E. Shaw
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December we recommended Adams Energy based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. Let’s take a glance at the recent hedge fund action regarding Yatra Online, Inc. (NASDAQ:YTRA).
Hedge fund activity in Yatra Online, Inc. (NASDAQ:YTRA)
At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards YTRA over the last 17 quarters. With hedge funds’ capital changing hands, there exist a few noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Among these funds, Altai Capital held the most valuable stake in Yatra Online, Inc. (NASDAQ:YTRA), which was worth $20.1 million at the end of the third quarter. On the second spot was MAK Capital One which amassed $11.3 million worth of shares. BlueCrest Capital Mgmt., Weiss Asset Management, 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, Altai Capital allocated the biggest weight to Yatra Online, Inc. (NASDAQ:YTRA), around 17.38% of its 13F portfolio. MAK Capital One is also relatively very bullish on the stock, dishing out 4.52 percent of its 13F equity portfolio to YTRA.
Since Yatra Online, Inc. (NASDAQ:YTRA) has experienced falling interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of hedgies that slashed their positions entirely in the third quarter. It’s worth mentioning that Israel Englander’s Millennium Management cut the biggest stake of the 750 funds tracked by Insider Monkey, totaling an estimated $1.8 million in stock, and David Kowitz and Sheldon Kasowitz’s Indus Capital was right behind this move, as the fund said goodbye to about $0.8 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to Yatra Online, Inc. (NASDAQ:YTRA). We will take a look at Delta Apparel, Inc. (NYSEAMEX:DLA), Inspired Entertainment, Inc. (NASDAQ:INSE), Luna Innovations Incorporated (NASDAQ:LUNA), and Red Lion Hotels Corporation (NYSE:RLH). This group of stocks’ market valuations is similar to YTRA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DLA | 2 | 7416 | -1 |
| INSE | 6 | 35260 | 0 |
| LUNA | 7 | 12148 | 4 |
| RLH | 13 | 48296 | 4 |
| Average | 7 | 25780 | 1.75 |
View the table here if you experience formatting issues.
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $42 million in YTRA’s case. Red Lion Hotels Corporation (NYSE:RLH) is the most popular stock in this table. On the other hand, Delta Apparel, Inc. (NYSEAMEX:DLA) is the least popular one with only 2 bullish hedge fund positions. Yatra Online, Inc. (NASDAQ:YTRA) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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. Unfortunately, YTRA wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); YTRA investors were disappointed as the stock returned -12.9% during the first two months of the fourth 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 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
