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 December 31st. We at Insider Monkey have made an extensive database of more than 887 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Urban Outfitters, Inc. (NASDAQ:URBN) based on those filings.
Is URBN stock a buy? Urban Outfitters, Inc. (NASDAQ:URBN) shareholders have witnessed an increase in support from the world’s most elite money managers of late. Urban Outfitters, Inc. (NASDAQ:URBN) was in 24 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 34. There were 22 hedge funds in our database with URBN holdings at the end of September. Our calculations also showed that URBN isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Robert Pohly of Samlyn Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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 website. With all of this in mind we’re going to take a gander at the latest hedge fund action surrounding Urban Outfitters, Inc. (NASDAQ:URBN).
Do Hedge Funds Think URBN Is A Good Stock To Buy Now?
At the end of December, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards URBN over the last 22 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Urban Outfitters, Inc. (NASDAQ:URBN) was held by Samlyn Capital, which reported holding $47.4 million worth of stock at the end of December. It was followed by Arrowstreet Capital with a $37.5 million position. Other investors bullish on the company included Coatue Management, Millennium Management, and MIK Capital. In terms of the portfolio weights assigned to each position MIK Capital allocated the biggest weight to Urban Outfitters, Inc. (NASDAQ:URBN), around 3.3% of its 13F portfolio. Samlyn Capital is also relatively very bullish on the stock, earmarking 0.68 percent of its 13F equity portfolio to URBN.
As industrywide interest jumped, key money managers have jumped into Urban Outfitters, Inc. (NASDAQ:URBN) headfirst. Samlyn Capital, managed by Robert Pohly, established the most outsized position in Urban Outfitters, Inc. (NASDAQ:URBN). Samlyn Capital had $47.4 million invested in the company at the end of the quarter. Kamyar Khajavi’s MIK Capital also initiated a $8.1 million position during the quarter. The other funds with brand new URBN positions are Paul Marshall and Ian Wace’s Marshall Wace LLP, Michael Gelband’s ExodusPoint Capital, and Jinghua Yan’s TwinBeech Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Urban Outfitters, Inc. (NASDAQ:URBN). We will take a look at Myovant Sciences Ltd. (NYSE:MYOV), Equinox Gold Corp. (NYSE:EQX), Ameresco Inc (NYSE:AMRC), The St. Joe Company (NYSE:JOE), Turquoise Hill Resources Ltd (NYSE:TRQ), Coca-Cola Consolidated Inc. (NASDAQ:COKE), and National Storage Affiliates Trust (NYSE:NSA). All of these stocks’ market caps resemble URBN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MYOV | 17 | 135013 | 0 |
| EQX | 17 | 78349 | 1 |
| AMRC | 15 | 113430 | 7 |
| JOE | 12 | 1207262 | -3 |
| TRQ | 12 | 374561 | 3 |
| COKE | 12 | 28203 | 0 |
| NSA | 18 | 136492 | -1 |
| Average | 14.7 | 296187 | 1 |
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 $296 million. That figure was $170 million in URBN’s case. National Storage Affiliates Trust (NYSE:NSA) is the most popular stock in this table. On the other hand The St. Joe Company (NYSE:JOE) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Urban Outfitters, Inc. (NASDAQ:URBN) is more popular among hedge funds. Our overall hedge fund sentiment score for URBN is 78.2. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 12.3% in 2021 through April 19th but still managed to beat the market by 0.9 percentage points. Hedge funds were also right about betting on URBN as the stock returned 44.6% since the end of December (through 4/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
