Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of DoorDash, Inc. (NYSE:DASH).
Is DASH a good stock to buy? DoorDash, Inc. (NYSE:DASH) has experienced a decrease in support from the world’s most elite money managers lately. DoorDash, Inc. (NYSE:DASH) was in 42 hedge funds’ portfolios at the end of September. The all time high for this statistic is 45. Our calculations also showed that DASH isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Alex Sacerdote of Whale Rock Capital Management
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 we’re going to check out the key hedge fund action surrounding DoorDash, Inc. (NYSE:DASH).
Do Hedge Funds Think DASH Is A Good Stock To Buy Now?
At Q3’s end, a total of 42 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from one quarter earlier. On the other hand, there were a total of 0 hedge funds with a bullish position in DASH a year ago. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
More specifically, Tiger Global Management LLC was the largest shareholder of DoorDash, Inc. (NYSE:DASH), with a stake worth $2275.3 million reported as of the end of September. Trailing Tiger Global Management LLC was Coatue Management, which amassed a stake valued at $1947.6 million. Lone Pine Capital, SCGE Management, and Whale Rock Capital 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 Himension Capital allocated the biggest weight to DoorDash, Inc. (NYSE:DASH), around 21.46% of its 13F portfolio. Calixto Global Investors is also relatively very bullish on the stock, dishing out 9.43 percent of its 13F equity portfolio to DASH.
Due to the fact that DoorDash, Inc. (NYSE:DASH) has witnessed declining sentiment from the aggregate hedge fund industry, it’s easy to see that there exists a select few money managers who were dropping their entire stakes by the end of the third quarter. It’s worth mentioning that Anand Desai’s Darsana Capital Partners dumped the biggest investment of the “upper crust” of funds followed by Insider Monkey, totaling an estimated $329.9 million in stock, and Andreas Halvorsen’s Viking Global was right behind this move, as the fund sold off about $82.7 million worth. These transactions are interesting, as total hedge fund interest dropped by 3 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks similar to DoorDash, Inc. (NYSE:DASH). These stocks are CME Group Inc (NASDAQ:CME), Cigna Corporation (NYSE:CI), Westpac Banking Corporation (NYSE:WBK), Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR), CSX Corporation (NYSE:CSX), ABB Ltd (NYSE:ABB), and BioNTech SE (NASDAQ:BNTX). This group of stocks’ market caps are similar to DASH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CME | 64 | 2686424 | 2 |
| CI | 58 | 2302081 | -5 |
| WBK | 6 | 34160 | 2 |
| PBR | 23 | 3004383 | -2 |
| CSX | 56 | 3915444 | 0 |
| ABB | 19 | 721684 | 4 |
| BNTX | 28 | 689029 | 8 |
| Average | 36.3 | 1907601 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 36.3 hedge funds with bullish positions and the average amount invested in these stocks was $1908 million. That figure was $9358 million in DASH’s case. CME Group Inc (NASDAQ:CME) is the most popular stock in this table. On the other hand Westpac Banking Corporation (NYSE:WBK) is the least popular one with only 6 bullish hedge fund positions. DoorDash, Inc. (NYSE:DASH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DASH is 61. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately DASH wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on DASH were disappointed as the stock returned -13.2% since the end of September (through 11/30) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
