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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards iQIYI, Inc. (NASDAQ:IQ).
Is iQIYI, Inc. (NASDAQ:IQ) a buy, sell, or hold? Investors who are in the know are turning bullish. The number of bullish hedge fund positions rose by 10 in recent months. Our calculations also showed that IQ isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). IQ was in 28 hedge funds’ portfolios at the end of the first quarter of 2020. There were 18 hedge funds in our database with IQ positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are a lot of methods investors can use to assess their stock investments. Some of the less known methods are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the best fund managers can outperform their index-focused peers by a superb amount (see the details here).
Lei Zhang of Hillhouse Capital Management
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s review the key hedge fund action regarding iQIYI, Inc. (NASDAQ:IQ).
Hedge fund activity in iQIYI, Inc. (NASDAQ:IQ)
At Q1’s end, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 56% from the previous quarter. On the other hand, there were a total of 22 hedge funds with a bullish position in IQ a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in iQIYI, Inc. (NASDAQ:IQ) was held by Hillhouse Capital Management, which reported holding $831.2 million worth of stock at the end of September. It was followed by Kayak Investment Partners with a $29 million position. Other investors bullish on the company included Serenity Capital, Tiger Global Management LLC, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Kayak Investment Partners allocated the biggest weight to iQIYI, Inc. (NASDAQ:IQ), around 12.85% of its 13F portfolio. Hillhouse Capital Management is also relatively very bullish on the stock, earmarking 11.2 percent of its 13F equity portfolio to IQ.
As one would reasonably expect, specific money managers have been driving this bullishness. Kingdon Capital, managed by Mark Kingdon, created the most valuable position in iQIYI, Inc. (NASDAQ:IQ). Kingdon Capital had $15.4 million invested in the company at the end of the quarter. Pasco Alfaro / Richard Tumure’s Miura Global Management also initiated a $14.8 million position during the quarter. The following funds were also among the new IQ investors: Joe DiMenna’s ZWEIG DIMENNA PARTNERS, Renaissance Technologies, and Li Ran’s Half Sky Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as iQIYI, Inc. (NASDAQ:IQ) but similarly valued. These stocks are Amcor plc (NYSE:AMCR), Leidos Holdings Inc (NYSE:LDOS), Nomura Holdings, Inc. (NYSE:NMR), and Markel Corporation (NYSE:MKL). This group of stocks’ market caps are closest to IQ’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMCR | 19 | 208401 | 9 |
| LDOS | 30 | 571063 | 3 |
| NMR | 5 | 18048 | 0 |
| MKL | 32 | 982316 | -5 |
| Average | 21.5 | 444957 | 1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $445 million. That figure was $983 million in IQ’s case. Markel Corporation (NYSE:MKL) is the most popular stock in this table. On the other hand Nomura Holdings, Inc. (NYSE:NMR) is the least popular one with only 5 bullish hedge fund positions. iQIYI, Inc. (NASDAQ:IQ) is not the most popular stock in this group but hedge fund interest is still above average. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. Unfortunately IQ wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on IQ were disappointed as the stock returned -6.8% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
