Is Pinterest, Inc. (PINS) Going to Burn These Hedge Funds?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Pinterest, Inc. (NYSE:PINS).

Is Pinterest, Inc. (NYSE:PINS) undervalued? Investors who are in the know were taking a pessimistic view. The number of bullish hedge fund bets went down by 5 lately. Pinterest, Inc. (NYSE:PINS) was in 58 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 95. Our calculations also showed that PINS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 63 hedge funds in our database with PINS positions at the end of the second quarter.

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. Keeping this in mind let’s take a glance at the recent hedge fund action regarding Pinterest, Inc. (NYSE:PINS).

Ken Griffin of Citadel Investment Group

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

At Q3’s end, a total of 58 of the hedge funds tracked by Insider Monkey were long this stock, a change of -8% from the second quarter of 2021. On the other hand, there were a total of 80 hedge funds with a bullish position in PINS a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Chris Rokos’s Rokos Capital Management has the most valuable call position in Pinterest, Inc. (NYSE:PINS), worth close to $448.4 million, comprising 9.6% of its total 13F portfolio. Sitting at the No. 2 spot is Viking Global, led by Andreas Halvorsen, holding a $368.4 million position; 1% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish encompass Philippe Laffont’s Coatue Management, and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Half Sky Capital allocated the biggest weight to Pinterest, Inc. (NYSE:PINS), around 31.76% of its 13F portfolio. VGI Partners is also relatively very bullish on the stock, earmarking 13.18 percent of its 13F equity portfolio to PINS.

Due to the fact that Pinterest, Inc. (NYSE:PINS) has experienced falling interest from the smart money, it’s easy to see that there lies a certain “tier” of fund managers that decided to sell off their entire stakes last quarter. It’s worth mentioning that Panayotis Takis Sparaggis’s Alkeon Capital Management cut the largest investment of all the hedgies monitored by Insider Monkey, totaling close to $356.7 million in stock. Gaurav Kapadia’s fund, XN Exponent Advisors, also cut its stock, about $132 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 5 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Pinterest, Inc. (NYSE:PINS) but similarly valued. We will take a look at Waste Connections, Inc. (NYSE:WCN), CBRE Group, Inc. (NYSE:CBRE), Affirm Holdings, Inc. (NASDAQ:AFRM), Verisk Analytics, Inc. (NASDAQ:VRSK), EPAM Systems Inc (NYSE:EPAM), Nasdaq, Inc. (NASDAQ:NDAQ), and Cummins Inc. (NYSE:CMI). This group of stocks’ market valuations are similar to PINS’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.3 hedge funds with bullish positions and the average amount invested in these stocks was $1292 million. That figure was $2007 million in PINS’s case. EPAM Systems Inc (NYSE:EPAM) is the most popular stock in this table. On the other hand Nasdaq, Inc. (NASDAQ:NDAQ) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Pinterest, Inc. (NYSE:PINS) is more popular among hedge funds. Our overall hedge fund sentiment score for PINS is 68.3. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately PINS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PINS were disappointed as the stock returned -21.4% since the end of the third quarter (through 11/30) 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.