Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Pinterest, Inc. (NYSE:PINS).
Pinterest, Inc. (NYSE:PINS) investors should be aware of a decrease in activity from the world’s largest hedge funds in recent months. Pinterest, Inc. (NYSE:PINS) was in 83 hedge funds’ portfolios at the end of March. 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 Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Alex Sacerdote of Whale Rock Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a look at the key hedge fund action regarding Pinterest, Inc. (NYSE:PINS).
Do Hedge Funds Think PINS Is A Good Stock To Buy Now?
At Q1’s end, a total of 83 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PINS over the last 23 quarters. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
The largest stake in Pinterest, Inc. (NYSE:PINS) was held by Alkeon Capital Management, which reported holding $506.9 million worth of stock at the end of December. It was followed by Whale Rock Capital Management with a $373.9 million position. Other investors bullish on the company included Melvin Capital Management, Coatue Management, and ARK Investment Management. In terms of the portfolio weights assigned to each position Half Sky Capital allocated the biggest weight to Pinterest, Inc. (NYSE:PINS), around 30.27% of its 13F portfolio. Ogborne Capital is also relatively very bullish on the stock, earmarking 16.46 percent of its 13F equity portfolio to PINS.
Since Pinterest, Inc. (NYSE:PINS) has experienced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few funds that elected to cut their full holdings heading into Q2. At the top of the heap, Rajiv Jain’s GQG Partners cut the largest stake of the “upper crust” of funds followed by Insider Monkey, worth about $93.9 million in stock, and Josh Resnick’s Jericho Capital Asset Management was right behind this move, as the fund said goodbye to about $69.4 million worth. These moves are interesting, as total hedge fund interest was cut by 12 funds heading into Q2.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Pinterest, Inc. (NYSE:PINS) but similarly valued. These stocks are Las Vegas Sands Corp. (NYSE:LVS), Rocket Companies, Inc. (NYSE:RKT), Carvana Co. (NYSE:CVNA), America Movil SAB de CV (NYSE:AMX), TC Energy Corporation (NYSE:TRP), Barclays PLC (NYSE:BCS), and Eni SpA (NYSE:E). All of these stocks’ market caps are closest to PINS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LVS | 62 | 2441021 | -1 |
| RKT | 21 | 208014 | 5 |
| CVNA | 64 | 7536279 | 1 |
| AMX | 15 | 93823 | -1 |
| TRP | 25 | 429089 | 6 |
| BCS | 10 | 79712 | -2 |
| E | 4 | 74023 | 0 |
| Average | 28.7 | 1551709 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.7 hedge funds with bullish positions and the average amount invested in these stocks was $1552 million. That figure was $4189 million in PINS’s case. Carvana Co. (NYSE:CVNA) is the most popular stock in this table. On the other hand Eni SpA (NYSE:E) is the least popular one with only 4 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 69.2. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 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 -7.9% since the end of the first quarter (through 6/11) 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.
