With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was SelectQuote, Inc. (NYSE:SLQT).
Is SLQT a good stock to buy? Money managers were getting more bullish. The number of bullish hedge fund positions increased by 2 lately. SelectQuote, Inc. (NYSE:SLQT) was in 19 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 29. Our calculations also showed that SLQT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Donald Sussman of Paloma Partners
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Do Hedge Funds Think SLQT Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 12% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SLQT over the last 24 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Redmile Group was the largest shareholder of SelectQuote, Inc. (NYSE:SLQT), with a stake worth $46.5 million reported as of the end of June. Trailing Redmile Group was Park West Asset Management, which amassed a stake valued at $21.7 million. Millennium Management, Ararat Capital, and PEAK6 Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Ararat Capital allocated the biggest weight to SelectQuote, Inc. (NYSE:SLQT), around 8.03% of its 13F portfolio. Birch Grove Capital is also relatively very bullish on the stock, dishing out 1.2 percent of its 13F equity portfolio to SLQT.
Now, key money managers have jumped into SelectQuote, Inc. (NYSE:SLQT) headfirst. Renaissance Technologies, created the most outsized position in SelectQuote, Inc. (NYSE:SLQT). Renaissance Technologies had $7.9 million invested in the company at the end of the quarter. Gregg J. Powers’s Private Capital Management also initiated a $1.3 million position during the quarter. The other funds with brand new SLQT positions are Cliff Asness’s AQR Capital Management, Jinghua Yan’s TwinBeech Capital, and Donald Sussman’s Paloma Partners.
Let’s also examine hedge fund activity in other stocks similar to SelectQuote, Inc. (NYSE:SLQT). These stocks are Corporate Office Properties Trust (NYSE:OFC), Worthington Industries, Inc. (NYSE:WOR), FirstCash, Inc. (NASDAQ:FCFS), Cathay General Bancorp (NASDAQ:CATY), GATX Corporation (NYSE:GATX), EnLink Midstream LLC (NYSE:ENLC), and Associated Banc Corp (NYSE:ASB). This group of stocks’ market valuations are similar to SLQT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OFC | 13 | 79567 | -6 |
| WOR | 15 | 52633 | 1 |
| FCFS | 17 | 118556 | 4 |
| CATY | 13 | 110863 | 1 |
| GATX | 17 | 216634 | 1 |
| ENLC | 10 | 46473 | -1 |
| ASB | 18 | 168185 | -6 |
| Average | 14.7 | 113273 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.7 hedge funds with bullish positions and the average amount invested in these stocks was $113 million. That figure was $140 million in SLQT’s case. Associated Banc Corp (NYSE:ASB) is the most popular stock in this table. On the other hand EnLink Midstream LLC (NYSE:ENLC) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks SelectQuote, Inc. (NYSE:SLQT) is more popular among hedge funds. Our overall hedge fund sentiment score for SLQT is 76.7. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Unfortunately SLQT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SLQT were disappointed as the stock returned -31.2% since the end of the second quarter (through 10/22) 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.
Follow Selectquote Inc. (NYSE:SLQT)
Follow Selectquote Inc. (NYSE:SLQT)
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Disclosure: None. This article was originally published at Insider Monkey.
