Is 111, Inc. (YI) A Good Stock To Buy?

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is 111, Inc. (NASDAQ:YI), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is 111, Inc. (NASDAQ:YI) a buy here? The best stock pickers were taking a pessimistic view. The number of bullish hedge fund bets dropped by 1 in recent months. 111, Inc. (NASDAQ:YI) was in 4 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 5. Our calculations also showed that YI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Donald Sussman of Paloma Partners

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. Now let’s go over the latest hedge fund action encompassing 111, Inc. (NASDAQ:YI).

Do Hedge Funds Think YI Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards YI over the last 23 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Renaissance Technologies has the most valuable position in 111, Inc. (NASDAQ:YI), worth close to $3.4 million, corresponding to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which holds a $0.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that hold long positions include Israel Englander’s Millennium Management, Donald Sussman’s Paloma Partners and . In terms of the portfolio weights assigned to each position 0 allocated the biggest weight to 111, Inc. (NASDAQ:YI), around 0.01% of its 13F portfolio. 0 is also relatively very bullish on the stock, designating 0.0042 percent of its 13F equity portfolio to YI.

Since 111, Inc. (NASDAQ:YI) has experienced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there were a few fund managers who were dropping their positions entirely in the first quarter. Interestingly, Neal Nathani and Darren Dinneen’s Totem Point Management dumped the largest stake of the 750 funds tracked by Insider Monkey, worth about $3.9 million in stock, and Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital) was right behind this move, as the fund said goodbye to about $0.1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds in the first quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as 111, Inc. (NASDAQ:YI) but similarly valued. We will take a look at Rite Aid Corporation (NYSE:RAD), Golar LNG Limited (NASDAQ:GLNG), Benchmark Electronics, Inc. (NYSE:BHE), Forestar Group Inc. (NYSE:FOR), Constellation Pharmaceuticals, Inc. (NASDAQ:CNST), Monarch Casino & Resort, Inc. (NASDAQ:MCRI), and ESSA Pharma Inc. (NASDAQ:EPIX). This group of stocks’ market values match YI’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.3 hedge funds with bullish positions and the average amount invested in these stocks was $193 million. That figure was $5 million in YI’s case. ESSA Pharma Inc. (NASDAQ:EPIX) is the most popular stock in this table. On the other hand Benchmark Electronics, Inc. (NYSE:BHE) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks 111, Inc. (NASDAQ:YI) is even less popular than BHE. Our overall hedge fund sentiment score for YI is 28. 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. Hedge funds dodged a bullet by taking a bearish stance towards YI. Our calculations showed that the top 10 most popular hedge fund stocks 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 but managed to beat the market again by 3.3 percentage points. Unfortunately YI wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); YI investors were disappointed as the stock returned -32.5% 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.

Disclosure: None. This article was originally published at Insider Monkey.