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 more than 730 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of June 28th, 2019. What do these smart investors think about eBay Inc (NASDAQ:EBAY)?
Is eBay Inc (NASDAQ:EBAY) a bargain? The smart money is becoming less confident. The number of long hedge fund positions retreated by 1 in recent months. Our calculations also showed that EBAY isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? 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 40 percentage points since May 2014 through May 30, 2019 (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 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to review the latest hedge fund action encompassing eBay Inc (NASDAQ:EBAY).
How have hedgies been trading eBay Inc (NASDAQ:EBAY)?
At Q2’s end, a total of 47 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -2% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards EBAY over the last 16 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Baupost Group held the most valuable stake in eBay Inc (NASDAQ:EBAY), which was worth $953.8 million at the end of the second quarter. On the second spot was Renaissance Technologies which amassed $461.6 million worth of shares. Moreover, Elliott Management, Two Sigma Advisors, and AQR Capital Management were also bullish on eBay Inc (NASDAQ:EBAY), allocating a large percentage of their portfolios to this stock.
Seeing as eBay Inc (NASDAQ:EBAY) has faced falling interest from the entirety of the hedge funds we track, it’s easy to see that there is a sect of fund managers who sold off their full holdings in the second quarter. Intriguingly, Alexander Mitchell’s Scopus Asset Management cut the largest investment of the 750 funds followed by Insider Monkey, worth about $42.7 million in stock. Greg Poole’s fund, Echo Street Capital Management, also dropped its stock, about $32.5 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 1 funds in the second quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as eBay Inc (NASDAQ:EBAY) but similarly valued. We will take a look at Regeneron Pharmaceuticals Inc (NASDAQ:REGN), Eaton Corporation plc (NYSE:ETN), V.F. Corporation (NYSE:VFC), and The Allstate Corporation (NYSE:ALL). This group of stocks’ market valuations are similar to EBAY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| REGN | 37 | 1330987 | 6 |
| ETN | 36 | 796336 | -3 |
| VFC | 32 | 985424 | 3 |
| ALL | 37 | 1897886 | 1 |
| Average | 35.5 | 1252658 | 1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.5 hedge funds with bullish positions and the average amount invested in these stocks was $1253 million. That figure was $3898 million in EBAY’s case. Regeneron Pharmaceuticals Inc (NASDAQ:REGN) is the most popular stock in this table. On the other hand V.F. Corporation (NYSE:VFC) is the least popular one with only 32 bullish hedge fund positions. Compared to these stocks eBay Inc (NASDAQ:EBAY) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately EBAY wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on EBAY were disappointed as the stock returned -1% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks (see the video below) among hedge funds as many of these stocks already outperformed the market in Q3.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
