The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider JD.Com Inc (NASDAQ:JD) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
JD.Com Inc (NASDAQ:JD) was in 75 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 90. JD shareholders have witnessed a decrease in enthusiasm from smart money in recent months. There were 89 hedge funds in our database with JD positions at the end of the fourth quarter. Our calculations also showed that JD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Chase Coleman of Tiger Global
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to take a gander at the recent hedge fund action regarding JD.Com Inc (NASDAQ:JD).
Do Hedge Funds Think JD Is A Good Stock To Buy Now?
At the end of March, a total of 75 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from the previous quarter. The graph below displays the number of hedge funds with bullish position in JD over the last 23 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.
When looking at the institutional investors followed by Insider Monkey, Tiger Global Management LLC, managed by Chase Coleman, holds the largest position in JD.Com Inc (NASDAQ:JD). Tiger Global Management LLC has a $4.3557 billion position in the stock, comprising 10% of its 13F portfolio. On Tiger Global Management LLC’s heels is GQG Partners, led by Rajiv Jain, holding a $1.6486 billion position; the fund has 6% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions contain Daniel Sundheim’s D1 Capital Partners, Ken Fisher’s Fisher Asset Management and Catherine D. Wood’s ARK Investment Management. In terms of the portfolio weights assigned to each position Kontiki Capital allocated the biggest weight to JD.Com Inc (NASDAQ:JD), around 30.93% of its 13F portfolio. Kylin Management is also relatively very bullish on the stock, dishing out 17.84 percent of its 13F equity portfolio to JD.
Because JD.Com Inc (NASDAQ:JD) has faced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there were a few hedgies who were dropping their entire stakes in the first quarter. Interestingly, Philippe Laffont’s Coatue Management dropped the biggest stake of the “upper crust” of funds monitored by Insider Monkey, totaling an estimated $401.1 million in stock, and Gabriel Plotkin’s Melvin Capital Management was right behind this move, as the fund dumped about $316.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 14 funds in the first quarter.
Let’s go over hedge fund activity in other stocks similar to JD.Com Inc (NASDAQ:JD). We will take a look at Royal Bank of Canada (NYSE:RY), Sony Corporation (NYSE:SNE), AstraZeneca plc (NYSE:AZN), Starbucks Corporation (NASDAQ:SBUX), Caterpillar Inc. (NYSE:CAT), Anheuser-Busch InBev SA/NV (NYSE:BUD), and Rio Tinto Group (NYSE:RIO). This group of stocks’ market values are similar to JD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RY | 18 | 716039 | 0 |
| SNE | 27 | 541868 | -1 |
| AZN | 34 | 2660857 | -7 |
| SBUX | 61 | 4442448 | -6 |
| CAT | 53 | 4956227 | 0 |
| BUD | 18 | 979916 | 0 |
| RIO | 25 | 1596509 | -1 |
| Average | 33.7 | 2270552 | -2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.7 hedge funds with bullish positions and the average amount invested in these stocks was $2271 million. That figure was $11310 million in JD’s case. Starbucks Corporation (NASDAQ:SBUX) is the most popular stock in this table. On the other hand Royal Bank of Canada (NYSE:RY) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks JD.Com Inc (NASDAQ:JD) is more popular among hedge funds. Our overall hedge fund sentiment score for JD is 66. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Unfortunately JD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on JD were disappointed as the stock returned -15.6% since the end of the first quarter (through 6/11) 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.
