Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Is PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) an exceptional stock to buy now? Prominent investors are taking a bullish view. The number of bullish hedge fund positions improved by 2 in recent months. At the end of this article we will also compare QQQ to other stocks, including LIBERTY GLOBAL PLC (NASDAQ:LBTYK), Delta Air Lines, Inc. (NYSE:DAL), and JD.Com Inc (ADR) (NASDAQ:JD) to get a better sense of its popularity.
Follow Powershares Qqq Trust (INDEXNYSEG:QQQQ)
Follow Powershares Qqq Trust (INDEXNYSEG:QQQQ)
If you’d ask most investors, hedge funds are perceived as unimportant, old investment tools of yesteryear. While there are over 8000 funds trading at present, Our experts choose to focus on the moguls of this club, about 700 funds. These money managers orchestrate most of all hedge funds’ total capital, and by observing their best picks, Insider Monkey has determined a few investment strategies that have historically outstripped Mr. Market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
With all of this in mind, we’re going to view the latest action encompassing PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ).
What have hedge funds been doing with PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ)?
At the Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Ken Griffin’s Citadel Investment Group has the biggest call position in PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ), worth close to $490.8 million, amounting to 0.5% of its total 13F portfolio. The second largest stake is held by John Overdeck and David Siegel’s Two Sigma Advisors, with a $81.2 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism encompass Frank Slattery’s Symmetry Peak Management, and Andrew Sandler’s Sandler Capital Management.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Ionic Capital Management, managed by Bart Baum, assembled the biggest call position in PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ). Ionic Capital Management had $41.8 million invested in the company at the end of the quarter. Sandler Capital Management also initiated a $36.1 million position during the quarter. The other funds with new positions in the stock are Glenn Russell Dubin’s Highbridge Capital Management and James Melcher’s Balestra.
Let’s now take a look at hedge fund activity in other stocks similar to PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ). These stocks are LIBERTY GLOBAL PLC (NASDAQ:LBTYK), Delta Air Lines, Inc. (NYSE:DAL), JD.Com Inc (ADR) (NASDAQ:JD), and Stryker Corporation (NYSE:SYK). This group of stocks’ market valuations are similar to QQQ’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LBTYK | 89 | 8277984 | 1 |
| DAL | 109 | 7318759 | -5 |
| JD | 71 | 9101669 | -4 |
| SYK | 26 | 883300 | -11 |
As you can see these stocks had an average of 74 hedge funds with bullish positions and the average amount invested in these stocks was $6.40 billion. That figure was $852 million in QQQ’s case. Delta Air Lines, Inc. (NYSE:DAL) is the most popular stock in this table. On the other hand Stryker Corporation (NYSE:SYK) is the least popular one with only 26 bullish hedge fund positions. Compared to these stocks PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) is even less popular than SYK. Considering that hedge funds aren’t fond of this stock in relation to other companies covered in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
