Hedge funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Paypal Holdings Inc (NASDAQ:PYPL) , so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Paypal Holdings Inc (NASDAQ:PYPL) was in 74 hedge funds’ portfolios at the end of the third quarter of 2016. PYPL investors should be aware of a decrease in support from the world’s most successful money managers recently. There were 84 hedge funds in our database with PYPL positions at the end of the previous quarter. At the end of this article we will also compare PYPL to other stocks including The TJX Companies, Inc. (NYSE:TJX), General Motors Company (NYSE:GM), and Metlife Inc (NYSE:MET) to get a better sense of its popularity.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Now, let’s go over the recent action regarding Paypal Holdings Inc (NASDAQ:PYPL).
What have hedge funds been doing with Paypal Holdings Inc (NASDAQ:PYPL)?
Heading into the fourth quarter of 2016, a total of 74 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 12% fall from one quarter earlier. On the other hand, there were a total of 84 hedge funds with a bullish position in PYPL at the beginning of this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Icahn Capital LP, led by Carl Icahn, holds the number one position in Paypal Holdings Inc (NASDAQ:PYPL). According to regulatory filings, the fund has a $1.39 billion position in the stock, comprising 7% of its 13F portfolio. Coming in second is Orbis Investment Management, led by William B. Gray, holding a $640.4 million position; 4.5% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism include Kerr Neilson’s Platinum Asset Management, Philippe Laffont’s Coatue Management and David Greenspan’s Slate Path Capital. We should note that Orbis Investment Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that dumped their entire stakes in the stock during the third quarter. Intriguingly, Stephen Mandel’s Lone Pine Capital dumped the largest investment of the “upper crust” of funds followed by Insider Monkey, totaling close to $404.5 million in stock. Jim Simons’ fund, Renaissance Technologies, also said goodbye to its stock, about $122.8 million worth of Paypal Holdings Inc (NASDAQ:PYPL) shares.
Let’s now take a look at hedge fund activity in other stocks similar to Paypal Holdings Inc (NASDAQ:PYPL). We will take a look at The TJX Companies, Inc. (NYSE:TJX), General Motors Company (NYSE:GM), Metlife Inc (NYSE:MET), and salesforce.com, inc. (NYSE:CRM). This group of stocks’ market values are similar to PYPL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TJX | 48 | 1763971 | -1 |
| GM | 62 | 3532048 | -3 |
| MET | 37 | 1525634 | -8 |
| CRM | 66 | 2135618 | 6 |
As you can see these stocks had an average of 53 hedge funds with bullish positions and the average amount invested in these stocks was $2.24 billion. That figure was $4.66 billion in PYPL’s case. salesforce.com, inc. (NYSE:CRM) is the most popular stock in this table. On the other hand Metlife Inc (NYSE:MET) is the least popular one with only 37 bullish hedge fund positions. Compared to these stocks Paypal Holdings Inc (NASDAQ:PYPL) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
