In this article you are going to find out whether hedge funds think KE Holdings Inc (NYSE:BEKE) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is BEKE a good stock to buy? KE Holdings Inc (NYSE:BEKE) investors should pay attention to a decrease in enthusiasm from smart money lately. KE Holdings Inc (NYSE:BEKE) was in 26 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 33. There were 31 hedge funds in our database with BEKE positions at the end of the second quarter. Our calculations also showed that BEKE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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 let’s analyze the recent hedge fund action surrounding KE Holdings Inc (NYSE:BEKE).
Philippe Laffont of Coatue Management
Do Hedge Funds Think BEKE Is A Good Stock To Buy Now?
At the end of September, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from the previous quarter. By comparison, 28 hedge funds held shares or bullish call options in BEKE a year ago. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
More specifically, Lone Pine Capital was the largest shareholder of KE Holdings Inc (NYSE:BEKE), with a stake worth $551.5 million reported as of the end of September. Trailing Lone Pine Capital was Tybourne Capital Management, which amassed a stake valued at $299 million. Alkeon Capital Management, Coatue Management, and Two Sigma Advisors 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 Kylin Management allocated the biggest weight to KE Holdings Inc (NYSE:BEKE), around 13.02% of its 13F portfolio. Long Corridor Asset Management is also relatively very bullish on the stock, designating 9.19 percent of its 13F equity portfolio to BEKE.
Judging by the fact that KE Holdings Inc (NYSE:BEKE) has experienced falling interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few hedge funds who sold off their entire stakes heading into Q4. At the top of the heap, Catherine D. Wood’s ARK Investment Management said goodbye to the largest investment of all the hedgies watched by Insider Monkey, totaling close to $276.6 million in stock, and John Armitage’s Egerton Capital Limited was right behind this move, as the fund cut about $112.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 5 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks similar to KE Holdings Inc (NYSE:BEKE). We will take a look at Ventas, Inc. (NYSE:VTR), McCormick & Company, Incorporated (NYSE:MKC), DTE Energy Company (NYSE:DTE), FleetCor Technologies, Inc. (NYSE:FLT), Dollar Tree, Inc. (NASDAQ:DLTR), TransUnion (NYSE:TRU), and Mid America Apartment Communities Inc (NYSE:MAA). This group of stocks’ market valuations resemble BEKE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VTR | 23 | 464641 | -2 |
| MKC | 35 | 1782097 | 1 |
| DTE | 22 | 426119 | -10 |
| FLT | 31 | 2095712 | -9 |
| DLTR | 38 | 1215394 | -4 |
| TRU | 38 | 2180644 | 3 |
| MAA | 22 | 254912 | 8 |
| Average | 29.9 | 1202788 | -1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.9 hedge funds with bullish positions and the average amount invested in these stocks was $1203 million. That figure was $1741 million in BEKE’s case. Dollar Tree, Inc. (NASDAQ:DLTR) is the most popular stock in this table. On the other hand DTE Energy Company (NYSE:DTE) is the least popular one with only 22 bullish hedge fund positions. KE Holdings Inc (NYSE:BEKE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BEKE is 36.1. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. A small number of hedge funds were also right about betting on BEKE as the stock returned 22.9% since the end of the third quarter (through 12/9) and outperformed the market by an even larger margin.
Follow Ke Holdings Inc. (NYSE:BEKE)
Follow Ke Holdings Inc. (NYSE:BEKE)
Suggested Articles:
- Top 15 Building Materials Companies in USA
- 10 Best Bank Stocks for Dividends
- 12 Best Industrial Stocks to Buy Now
Disclosure: None. This article was originally published at Insider Monkey.
