We can judge whether Tuniu Corporation (NASDAQ:TOUR) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
Tuniu Corporation (NASDAQ:TOUR) has experienced an increase in hedge fund sentiment lately. TOUR was in 5 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 3 hedge funds in our database with TOUR holdings at the end of the previous quarter. Our calculations also showed that tour isn’t among the 30 most popular stocks among hedge funds.
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’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Matthew Hulsizer of PEAK6 Capital
We’re going to take a gander at the key hedge fund action encompassing Tuniu Corporation (NASDAQ:TOUR).
What does the smart money think about Tuniu Corporation (NASDAQ:TOUR)?
At Q4’s end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 67% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards TOUR over the last 14 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
More specifically, Yiheng Capital was the largest shareholder of Tuniu Corporation (NASDAQ:TOUR), with a stake worth $28 million reported as of the end of December. Trailing Yiheng Capital was Renaissance Technologies, which amassed a stake valued at $4.6 million. D E Shaw, Millennium Management, and PEAK6 Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, key hedge funds have jumped into Tuniu Corporation (NASDAQ:TOUR) headfirst. Yiheng Capital, managed by Jonathan Guo, established the largest position in Tuniu Corporation (NASDAQ:TOUR). Yiheng Capital had $28 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $0.3 million investment in the stock during the quarter. The only other fund with a brand new TOUR position is Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Tuniu Corporation (NASDAQ:TOUR) but similarly valued. These stocks are GMS Inc. (NYSE:GMS), Opera Limited (NASDAQ:OPRA), Bojangles’ Inc (NASDAQ:BOJA), and ProQR Therapeutics NV (NASDAQ:PRQR). This group of stocks’ market values resemble TOUR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GMS | 20 | 97296 | -4 |
| OPRA | 5 | 5242 | -3 |
| BOJA | 12 | 37500 | -2 |
| PRQR | 11 | 104917 | -1 |
| Average | 12 | 61239 | -2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. That figure was $33 million in TOUR’s case. GMS Inc. (NYSE:GMS) is the most popular stock in this table. On the other hand Opera Limited (NASDAQ:OPRA) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Tuniu Corporation (NASDAQ:TOUR) is even less popular than OPRA. Hedge funds dodged a bullet by taking a bearish stance towards TOUR. Our calculations showed that the top 15 most popular hedge fund stocks returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately TOUR wasn’t nearly as popular as these 15 stock (hedge fund sentiment was very bearish); TOUR investors were disappointed as the stock returned -1.4% 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.
