Is The Party Over for These Growth Stocks?

#3 Wayfair Inc (NYSE:W)

– Hedge Funds with Long Positions (as of June 30): 23

– Value of Hedge Funds’ Holdings (as of June 30): $487.57 Million

Moving on, the ownership of Wayfair Inc (NYSE:W) among investors tracked by us declined by seven during the second quarter, whereas the aggregate value of their holdings in it shrunk by almost 14%. Funds that sold their entire stake in the company during that period included James Crichton’s Hitchwood Capital Management and Paul Marshall and Ian Wace’s Marshall Wace LLP. Though Wayfair Inc (NYSE:W)’s stock has mostly been range bound since past one year, it is currently trading down by 24% year-to-date. At the end of August the online furniture retailer acquired messaging application Trumpit for an undisclosed sum of money with the intention of using the latter’s technology to expand its customer service offerings. Some of the analysts who track Wayfair think that the company can grow its top-line in the low-teens range over the next five years and can achieve low single-digit profit margins going forward. At the beginning of this month, analysts at Canaccord Genuity reiterated their ‘Buy’ rating and $55 price target on the stock, which represents an upside potential of 55.23%.

#2 Vipshop Holdings Ltd – ADR (NYSE:VIPS)

– Hedge Funds with Long Positions (as of June 30): 25

– Value of Hedge Funds’ Holdings (as of June 30): $604.27 Million

During the second quarter, the number of tracked by us that were long Vipshop Holdings Ltd – ADR (NYSE:VIPS) fell by 17 and the aggregate value of their holdings in it shrunk by $275 million. However, some of those funds might be regretting their decisions now as Vipshop Holdings Ltd – ADR (NYSE:VIPS)’s stock recouped all of its second-quarter loss during the next three months and is currently trading down by 11% year-to-date. The Chinese online discount retailer reported better-than-expected numbers for its second quarter in August, which prompted several analysts to up their price target on its stock. Among those were analysts Nomura, who on October 17, increased the target to $20 from $17 reiterating a ‘Buy’ rating.

#1 Ctrip.Com International Ltd (ADR) (NASDAQ:CTRP)

– Hedge Funds with Long Positions (as of June 30): 43

– Value of Hedge Funds’ Holdings (as of June 30): $2.21 Billion

Ctrip.Com International Ltd (ADR) (NASDAQ:CTRP) was another Chinese growth story that saw its popularity suffer a big drop during the second quarter among hedge funds covered by us as its ownership among them slid by 24 and the aggregate value of their holdings in it fell by $232 million. Similar to Vipshop Holdings , Ctrip.Com International Ltd (ADR) (NASDAQ:CTRP)’s stock has also performed remarkably well since the beginning of second-half of 2016, which has enabled it to recover from the beating it took earlier in the year. Till some time ago, a lot of analysts were apprehensive of Ctrip.Com’s strategy to invest in its rivals like Qunar and eLong, Inc. as they feared it will divert the company from focusing on its own organic growth. However, today most of them consider those consolidations as a clever move made by Ctrip.Com to bring down the competition in the Chinese travel market and strengthen its market position. Ctrip.Com’s stock currently sports an average rating of ‘Overweight’ and an average price target of $52.19 from the 28 leading analysts on the Street.

Disclosure: None