Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Bilibili Inc. (NASDAQ:BILI) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Bilibili Inc. (NASDAQ:BILI) was in 35 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 53. BILI investors should be aware of a decrease in hedge fund interest in recent months. There were 47 hedge funds in our database with BILI holdings at the end of June. Our calculations also showed that BILI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind let’s analyze the latest hedge fund action encompassing Bilibili Inc. (NASDAQ:BILI).
Do Hedge Funds Think BILI Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -26% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BILI over the last 25 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.
More specifically, Lone Pine Capital was the largest shareholder of Bilibili Inc. (NASDAQ:BILI), with a stake worth $569.9 million reported as of the end of September. Trailing Lone Pine Capital was Yiheng Capital, which amassed a stake valued at $321.4 million. Fisher Asset Management, Citadel Investment Group, and Jericho Capital Asset Management 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 Yiheng Capital allocated the biggest weight to Bilibili Inc. (NASDAQ:BILI), around 15.82% of its 13F portfolio. Kylin Management is also relatively very bullish on the stock, designating 15.39 percent of its 13F equity portfolio to BILI.
Seeing as Bilibili Inc. (NASDAQ:BILI) has witnessed bearish sentiment from hedge fund managers, we can see that there is a sect of fund managers who were dropping their entire stakes in the third quarter. At the top of the heap, Ken Griffin’s Citadel Investment Group said goodbye to the biggest investment of all the hedgies monitored by Insider Monkey, comprising an estimated $297.8 million in stock, and Richard Driehaus’s Driehaus Capital was right behind this move, as the fund said goodbye to about $66.4 million worth. These transactions are interesting, as total hedge fund interest dropped by 12 funds in the third quarter.
Let’s go over hedge fund activity in other stocks similar to Bilibili Inc. (NASDAQ:BILI). We will take a look at Fortive Corporation (NYSE:FTV), Realty Income Corporation (NYSE:O), Coca-Cola European Partners plc (NYSE:CCEP), PT Telekomunikasi Indonesia (NYSE:TLK), Toast Inc. (NYSE:TOST), CDW Corporation (NASDAQ:CDW), and Avantor, Inc. (NYSE:AVTR). This group of stocks’ market caps are closest to BILI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FTV | 32 | 2130115 | 1 |
| O | 22 | 275031 | -1 |
| CCEP | 32 | 1192664 | 1 |
| TLK | 4 | 170252 | -1 |
| TOST | 38 | 567350 | 38 |
| CDW | 37 | 1906004 | 10 |
| AVTR | 53 | 2439815 | 9 |
| Average | 31.1 | 1240176 | 8.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.1 hedge funds with bullish positions and the average amount invested in these stocks was $1240 million. That figure was $1510 million in BILI’s case. Avantor, Inc. (NYSE:AVTR) is the most popular stock in this table. On the other hand PT Telekomunikasi Indonesia (NYSE:TLK) is the least popular one with only 4 bullish hedge fund positions. Bilibili Inc. (NASDAQ:BILI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BILI is 44.4. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, BILI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BILI were disappointed as the stock returned -46.7% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.
Follow Bilibili Inc. (NASDAQ:BILI)
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Disclosure: None. This article was originally published at Insider Monkey.
