Is Genius Sports Ltd (GENI) A Good Stock To Buy?

Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Genius Sports Ltd (NYSE:GENI).

Is Genius Sports Ltd (GENI) a good stock to buy? The smart money was becoming more confident. The number of bullish hedge fund positions increased by 39 lately. Genius Sports Ltd (NYSE:GENI) was in 39 hedge funds’ portfolios at the end of June. Our calculations also showed that GENI isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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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 check out the new hedge fund action encompassing Genius Sports Ltd (NYSE:GENI).

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

At second quarter’s end, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 39 from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in GENI a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Washington Harbour Partners was the largest shareholder of Genius Sports Ltd (NYSE:GENI), with a stake worth $62 million reported as of the end of June. Trailing Washington Harbour Partners was Rima Senvest Management, which amassed a stake valued at $52.6 million. Millennium Management, Luxor Capital Group, and Intrinsic Edge Capital 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 1060 Capital Management allocated the biggest weight to Genius Sports Ltd (NYSE:GENI), around 20.6% of its 13F portfolio. Washington Harbour Partners is also relatively very bullish on the stock, setting aside 9.76 percent of its 13F equity portfolio to GENI.

As one would reasonably expect, some big names were breaking ground themselves. Washington Harbour Partners, managed by Mina Faltas, assembled the most outsized position in Genius Sports Ltd (NYSE:GENI). Washington Harbour Partners had $62 million invested in the company at the end of the quarter. Richard Mashaal’s Rima Senvest Management also initiated a $52.6 million position during the quarter. The following funds were also among the new GENI investors: Israel Englander’s Millennium Management, Christian Leone’s Luxor Capital Group, and Mark Coe’s Intrinsic Edge Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Genius Sports Ltd (NYSE:GENI) but similarly valued. We will take a look at Murphy Oil Corporation (NYSE:MUR), Murphy USA Inc. (NYSE:MUSA), Accolade, Inc. (NASDAQ:ACCD), Onto Innovation Inc. (NYSE:ONTO), SPS Commerce, Inc. (NASDAQ:SPSC), Assured Guaranty Ltd. (NYSE:AGO), and White Mountains Insurance Group Ltd (NYSE:WTM). This group of stocks’ market values match GENI’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.1 hedge funds with bullish positions and the average amount invested in these stocks was $274 million. That figure was $375 million in GENI’s case. Murphy USA Inc. (NYSE:MUSA) is the most popular stock in this table. On the other hand Assured Guaranty Ltd. (NYSE:AGO) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Genius Sports Ltd (NYSE:GENI) is more popular among hedge funds. Our overall hedge fund sentiment score for GENI is 90. 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 gained 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Unfortunately GENI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on GENI were disappointed as the stock returned -7.7% since the end of the second quarter (through 10/11) 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.

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