The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded SEMrush Holdings, Inc. (NYSE:SEMR) based on those filings.
Is SEMR a good stock to buy? Investors who are in the know were getting more bullish. The number of long hedge fund positions went up by 20 lately. SEMrush Holdings, Inc. (NYSE:SEMR) was in 20 hedge funds’ portfolios at the end of March. Our calculations also showed that SEMR 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.
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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. With all of this in mind we’re going to take a peek at the recent hedge fund action surrounding SEMrush Holdings, Inc. (NYSE:SEMR).
Do Hedge Funds Think SEMR Is A Good Stock To Buy Now?
At the end of March, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20 from the fourth quarter of 2020. On the other hand, there were a total of 0 hedge funds with a bullish position in SEMR a year ago. 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, Ancient Art (Teton Capital) was the largest shareholder of SEMrush Holdings, Inc. (NYSE:SEMR), with a stake worth $28.8 million reported as of the end of March. Trailing Ancient Art (Teton Capital) was Millennium Management, which amassed a stake valued at $4.5 million. HBK Investments, Balyasny Asset Management, and CaaS Capital 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 Ancient Art (Teton Capital) allocated the biggest weight to SEMrush Holdings, Inc. (NYSE:SEMR), around 2.79% of its 13F portfolio. Collaborative Holdings Management is also relatively very bullish on the stock, earmarking 0.17 percent of its 13F equity portfolio to SEMR.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Ancient Art (Teton Capital), managed by Quincy Lee, established the most valuable position in SEMrush Holdings, Inc. (NYSE:SEMR). Ancient Art (Teton Capital) had $28.8 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $4.5 million investment in the stock during the quarter. The following funds were also among the new SEMR investors: David Costen Haley’s HBK Investments, Dmitry Balyasny’s Balyasny Asset Management, and Frank Fu’s CaaS Capital.
Let’s now take a look at hedge fund activity in other stocks similar to SEMrush Holdings, Inc. (NYSE:SEMR). These stocks are Aurinia Pharmaceuticals Inc (NASDAQ:AUPH), Addus Homecare Corporation (NASDAQ:ADUS), Malibu Boats Inc (NASDAQ:MBUU), Cytokinetics, Inc. (NASDAQ:CYTK), Steelcase Inc. (NYSE:SCS), Northwest Natural Holding Company (NYSE:NWN), and ICF International Inc (NASDAQ:ICFI). This group of stocks’ market valuations are closest to SEMR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AUPH | 27 | 224594 | 3 |
| ADUS | 17 | 62230 | -1 |
| MBUU | 16 | 150234 | 0 |
| CYTK | 29 | 585164 | 3 |
| SCS | 19 | 127268 | 2 |
| NWN | 10 | 28380 | 0 |
| ICFI | 12 | 28041 | -1 |
| Average | 18.6 | 172273 | 0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.6 hedge funds with bullish positions and the average amount invested in these stocks was $172 million. That figure was $57 million in SEMR’s case. Cytokinetics, Inc. (NASDAQ:CYTK) is the most popular stock in this table. On the other hand Northwest Natural Holding Company (NYSE:NWN) is the least popular one with only 10 bullish hedge fund positions. SEMrush Holdings, Inc. (NYSE:SEMR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SEMR is 52.1. 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 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Hedge funds were also right about betting on SEMR as the stock returned 66% since the end of Q1 (through 7/16) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
