Before we spend days researching a stock idea we’d like to take a look at how hedge funds and billionaire investors recently traded that stock. S&P 500 Index ETF (SPY) lost 13.5% in the fourth quarter. Seven out of 11 industry groups in the S&P 500 Index were down more than 20% from their 52-week highs at the trough of the stock market crash. The average return of a randomly picked stock in the index was even worse. This means you (or a monkey throwing a dart) have less than an even chance of beating the market by randomly picking a stock. On the other hand, the top 15 most popular S&P 500 stocks among hedge funds not only recouped their Q4 losses but also outperformed the index by more than 3 percentage points. In this article, we will take a look at what hedge funds think about Fang Holdings Limited (NYSE:SFUN).
Fang Holdings Limited (NYSE:SFUN) shareholders have witnessed an increase in activity from the world’s largest hedge funds of late. Our calculations also showed that SFUN isn’t among the 30 most popular stocks among hedge funds.
In the 21st century investor’s toolkit there are many gauges stock traders use to size up their holdings. A pair of the best gauges are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the elite money managers can outclass the broader indices by a superb margin (see the details here).
Let’s analyze the fresh hedge fund action regarding Fang Holdings Limited (NYSE:SFUN).
Hedge fund activity in Fang Holdings Limited (NYSE:SFUN)
Heading into the first quarter of 2019, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 29% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in SFUN over the last 14 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Fang Holdings Limited (NYSE:SFUN) was held by Millennium Management, which reported holding $1.5 million worth of stock at the end of December. It was followed by D E Shaw with a $1.3 million position. Other investors bullish on the company included Arrowstreet Capital, Renaissance Technologies, and LMR Partners.
As industrywide interest jumped, specific money managers were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the largest position in Fang Holdings Limited (NYSE:SFUN). Arrowstreet Capital had $0.7 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $0.6 million investment in the stock during the quarter. The other funds with brand new SFUN positions are Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, John Overdeck and David Siegel’s Two Sigma Advisors, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..
Let’s also examine hedge fund activity in other stocks similar to Fang Holdings Limited (NYSE:SFUN). We will take a look at Tucows Inc. (NASDAQ:TCX), Quad/Graphics, Inc. (NYSE:QUAD), SurModics, Inc. (NASDAQ:SRDX), and AC Immune SA (NASDAQ:ACIU). All of these stocks’ market caps resemble SFUN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TCX | 7 | 47753 | -2 |
| QUAD | 20 | 34088 | 7 |
| SRDX | 17 | 144091 | 4 |
| ACIU | 8 | 71314 | -1 |
| Average | 13 | 74312 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $74 million. That figure was $4 million in SFUN’s case. Quad/Graphics, Inc. (NYSE:QUAD) is the most popular stock in this table. On the other hand Tucows Inc. (NASDAQ:TCX) is the least popular one with only 7 bullish hedge fund positions. Fang Holdings Limited (NYSE:SFUN) 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately SFUN wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); SFUN investors were disappointed as the stock returned 11.9% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
