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. We have processed the filings of the more than 873 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 30th holdings, data that is available nowhere else. Should you consider Formula One Group (NASDAQ:FWONK) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Formula One Group (NASDAQ:FWONK) a buy right now? Investors who are in the know were turning bullish. The number of bullish hedge fund bets improved by 4 lately. Formula One Group (NASDAQ:FWONK) was in 41 hedge funds’ portfolios at the end of June. The all time high for this statistic is 54. Our calculations also showed that FWONK isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 37 hedge funds in our database with FWONK positions at the end of the first quarter.
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’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Christian Leone of Luxor Capital Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. 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. 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. With all of this in mind let’s take a look at the recent hedge fund action surrounding Formula One Group (NASDAQ:FWONK).
Do Hedge Funds Think FWONK Is A Good Stock To Buy Now?
At second quarter’s end, a total of 41 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards FWONK over the last 24 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Daniel S. Och’s OZ Management has the largest position in Formula One Group (NASDAQ:FWONK), worth close to $372.2 million, amounting to 2.8% of its total 13F portfolio. Coming in second is William Crowley, William Harker, and Stephen Blass of Ashe Capital, with a $282.1 million position; the fund has 17.4% of its 13F portfolio invested in the stock. Remaining peers that are bullish encompass Ricky Sandler’s Eminence Capital, Brett Barakett’s Tremblant Capital and GregardáHeje’s Kontiki Capital. In terms of the portfolio weights assigned to each position Fosse Capital Partners allocated the biggest weight to Formula One Group (NASDAQ:FWONK), around 18.96% of its 13F portfolio. Ashe Capital is also relatively very bullish on the stock, earmarking 17.4 percent of its 13F equity portfolio to FWONK.
As industrywide interest jumped, key money managers have been driving this bullishness. Atreides Management, managed by Gavin Baker, assembled the largest position in Formula One Group (NASDAQ:FWONK). Atreides Management had $72.2 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also made a $22.3 million investment in the stock during the quarter. The following funds were also among the new FWONK investors: Christian Leone’s Luxor Capital Group, Steve Cohen’s Point72 Asset Management, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.
Let’s now review hedge fund activity in other stocks similar to Formula One Group (NASDAQ:FWONK). We will take a look at F5 Networks, Inc. (NASDAQ:FFIV), Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), Santander Consumer USA Holdings Inc (NYSE:SC), Levi Strauss & Co. (NYSE:LEVI), Floor & Decor Holdings, Inc. (NYSE:FND), Watsco Inc (NYSE:WSO), and Virgin Galactic Holdings, Inc. (NYSE:SPCE). This group of stocks’ market valuations match FWONK’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FFIV | 30 | 704710 | 4 |
| KOF | 9 | 461993 | -1 |
| SC | 26 | 325714 | 3 |
| LEVI | 30 | 414270 | 11 |
| FND | 28 | 1164208 | -10 |
| WSO | 26 | 306144 | 4 |
| SPCE | 18 | 181423 | 1 |
| Average | 23.9 | 508352 | 1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.9 hedge funds with bullish positions and the average amount invested in these stocks was $508 million. That figure was $1724 million in FWONK’s case. F5 Networks, Inc. (NASDAQ:FFIV) is the most popular stock in this table. On the other hand Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Formula One Group (NASDAQ:FWONK) is more popular among hedge funds. Our overall hedge fund sentiment score for FWONK is 81.8. 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. 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 returned 21.8% in 2021 through October 11th but still managed to beat the market by 4.4 percentage points. Hedge funds were also right about betting on FWONK as the stock returned 10.5% since the end of June (through 10/11) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
