The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Lyft, Inc. (NASDAQ:LYFT) based on those filings.
Is Lyft, Inc. (NASDAQ:LYFT) the right pick for your portfolio? Money managers are getting less optimistic. The number of bullish hedge fund positions went down by 14 lately. Our calculations also showed that LYFT isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). LYFT was in 31 hedge funds’ portfolios at the end of the first quarter of 2020. There were 45 hedge funds in our database with LYFT holdings at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
To most traders, hedge funds are assumed to be worthless, old financial tools of years past. While there are over 8000 funds in operation at present, We look at the masters of this group, about 850 funds. It is estimated that this group of investors administer the majority of the smart money’s total asset base, and by watching their best stock picks, Insider Monkey has uncovered a few investment strategies that have historically outrun Mr. Market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Glen Kacher of Light Street Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a look at the latest hedge fund action encompassing Lyft, Inc. (NASDAQ:LYFT).
How are hedge funds trading Lyft, Inc. (NASDAQ:LYFT)?
At Q1’s end, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -31% from the previous quarter. On the other hand, there were a total of 71 hedge funds with a bullish position in LYFT a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Ken Griffin’s Citadel Investment Group has the most valuable position in Lyft, Inc. (NASDAQ:LYFT), worth close to $127.5 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Doug Silverman and Alexander Klabin of Senator Investment Group, with a $68.1 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish comprise Glen Kacher’s Light Street Capital, and Panayotis Takis Sparaggis’s Alkeon Capital Management. In terms of the portfolio weights assigned to each position Tenzing Global Investors allocated the biggest weight to Lyft, Inc. (NASDAQ:LYFT), around 5.93% of its 13F portfolio. Glade Brook Capital Partners is also relatively very bullish on the stock, earmarking 3.83 percent of its 13F equity portfolio to LYFT.
Since Lyft, Inc. (NASDAQ:LYFT) has experienced declining sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of hedge funds that elected to cut their positions entirely in the first quarter. Interestingly, Alexander Mitchell’s Scopus Asset Management dumped the biggest investment of all the hedgies tracked by Insider Monkey, valued at about $55.4 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also sold off its stock, about $50 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 14 funds in the first quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Lyft, Inc. (NASDAQ:LYFT) but similarly valued. These stocks are Packaging Corporation Of America (NYSE:PKG), Graco Inc. (NYSE:GGG), Carnival plc (NYSE:CUK), and Banco de Chile (NYSE:BCH). This group of stocks’ market values are closest to LYFT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PKG | 23 | 105812 | 5 |
| GGG | 21 | 157995 | 0 |
| CUK | 9 | 41281 | -5 |
| BCH | 4 | 34819 | -6 |
| Average | 14.25 | 84977 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $389 million in LYFT’s case. Packaging Corporation Of America (NYSE:PKG) is the most popular stock in this table. On the other hand Banco de Chile (NYSE:BCH) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Lyft, Inc. (NASDAQ:LYFT) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. Unfortunately LYFT wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on LYFT were disappointed as the stock returned 16.4% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
