Is ANGI Homeservices Inc. (NASDAQ:ANGI) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
ANGI Homeservices Inc. (NASDAQ:ANGI) was in 19 hedge funds’ portfolios at the end of September. ANGI investors should pay attention to an increase in hedge fund interest recently. There were 13 hedge funds in our database with ANGI positions at the end of the previous quarter. Our calculations also showed that ANGI 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’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a gander at the recent hedge fund action regarding ANGI Homeservices Inc. (NASDAQ:ANGI).
How are hedge funds trading ANGI Homeservices Inc. (NASDAQ:ANGI)?
Heading into the fourth quarter of 2018, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 46% from one quarter earlier. By comparison, 10 hedge funds held shares or bullish call options in ANGI heading into this year. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
More specifically, Luxor Capital Group was the largest shareholder of ANGI Homeservices Inc. (NASDAQ:ANGI), with a stake worth $308 million reported as of the end of September. Trailing Luxor Capital Group was SQN Investors, which amassed a stake valued at $71 million. Tiger Eye Capital, PAR Capital Management, and Echo Street Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Now, specific money managers were leading the bulls’ herd. Echo Street Capital Management, managed by Greg Poole, assembled the biggest position in ANGI Homeservices Inc. (NASDAQ:ANGI). Echo Street Capital Management had $16.8 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $4.9 million investment in the stock during the quarter. The following funds were also among the new ANGI investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Jim Simons’s Renaissance Technologies, and Ernest Chow and Jonathan Howe’s Sensato Capital Management.
Let’s check out hedge fund activity in other stocks similar to ANGI Homeservices Inc. (NASDAQ:ANGI). We will take a look at Masco Corporation (NYSE:MAS), Canopy Growth Corporation (NYSE:CGC), Ally Financial Inc (NYSE:ALLY), and Ralph Lauren Corporation (NYSE:RL). This group of stocks’ market caps are similar to ANGI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MAS | 35 | 1069198 | 5 |
| CGC | 16 | 113854 | 9 |
| ALLY | 40 | 2200238 | -6 |
| RL | 28 | 990094 | 3 |
| Average | 29.75 | 1093346 | 2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.75 hedge funds with bullish positions and the average amount invested in these stocks was $1.09 billion. That figure was $482 million in ANGI’s case. Ally Financial Inc (NYSE:ALLY) is the most popular stock in this table. On the other hand Canopy Growth Corporation (NYSE:CGC) is the least popular one with only 16 bullish hedge fund positions. ANGI Homeservices Inc. (NASDAQ:ANGI) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ALLY might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
