Is JD.Com Inc (ADR) (NASDAQ:JD) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. They fail miserably sometimes but historically their consensus stock picks outperformed the market after adjusting for known risk factors.
JD.Com Inc (ADR) (NASDAQ:JD) investors should be aware of a decrease in enthusiasm from smart money lately. At the end of this article we will also compare JD to other stocks including Stryker Corporation (NYSE:SYK), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), and The Kroger Co. (NYSE:KR) to get a better sense of its popularity.
What have hedge funds been doing with JD.Com Inc (ADR) (NASDAQ:JD)?
At Q3’s end, a total of 71 of the hedge funds tracked by Insider Monkey were long in this stock, a change of -5% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund holdings data compiled by Insider Monkey, Hillhouse Capital Management, managed by Lei Zhang, holds the biggest position in JD.Com Inc (ADR) (NASDAQ:JD). Hillhouse Capital Management has a $3.56 billion position in the stock, comprising 72.4% of its 13F portfolio. Coming in second is Tiger Global Management LLC, with a $1.5 billion position; 18.5% of its 13F portfolio is allocated to the company. Remaining peers that are bullish encompass Stephen Mandel’s Lone Pine Capital, William B. Gray’s Orbis Investment Management and Philippe Laffont’s Coatue Management.
Because JD.Com Inc (ADR) (NASDAQ:JD) has witnessed bearish sentiment from the aggregate hedge fund industry, we can see that there is a sect of money managers who were dropping their entire stakes in third quarter. Intriguingly, Louis Bacon’s Moore Global Investments said goodbye to the largest stake of the 700 funds tracked by Insider Monkey, totaling an estimated $48.3 million in stock. Daniel Benton’s fund, Andor Capital Management, also said goodbye to its stock, about $44.3 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 4 funds in third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as JD.Com Inc (ADR) (NASDAQ:JD) but similarly valued. These stocks are Stryker Corporation (NYSE:SYK), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), The Kroger Co. (NYSE:KR), and Bank of Montreal (USA) (NYSE:BMO). All of these stocks’ market caps are closest to JD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SYK | 26 | 883300 | -11 |
| ALXN | 33 | 2409398 | -16 |
| KR | 42 | 1277700 | 9 |
| BMO | 17 | 201745 | -2 |
As you can see these stocks had an average of 29.5 hedge funds with bullish positions and the average amount invested in these stocks was $1193 million.That figure was $9,102 million in JD’s case. The Kroger Co. (NYSE:KR) is the most popular stock in this table. On the other hand Bank of Montreal (USA) (NYSE:BMO) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks JD.Com Inc (ADR) (NASDAQ:JD) is more popular among hedge funds. Considering that hedge funds are fond of this stock, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
