Vipshop Holdings Ltd – ADR (NYSE:VIPS)‘s stock experienced healthy first quarter, with the stock price going up by more than 40% in the first three months of 2015. The stock hit its all-time high in April, but since then, it has lost much of its mojo, plunging by around 20%. However, Summit Research Analyst Henry Guo published a report on Vipshop Holdings Ltd – ADR (NYSE:VIPS) on Monday, maintaining a ‘Buy’ rating with a price target of $35 on the stock, upside potential of nearly 50%, and the stock off to a strong start in trading this morning, up by 2.54%. Vipshop Holdings Ltd – ADR (NYSE:VIPS)’s shares have under-performed in the last few weeks mainly due to concerns surrounding weaker top line growth. But Guo feels that the company is capable of handling the top-line growth pressure. Not just Summit Research, but other firms like Stifel Nicolaus, HSBC, and Jefferies have a ‘Buy’ rating on the stock. Let’s take a look now at how hedge funds, who actually have to be bullish with their money, not just their words, feel about this stock.
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Overall, hedge funds were positive on this stock, as the number of hedge funds holding positions in the stock increased to 48 at the end of the first quarter from 47 at the end of the fourth quarter. Overall, aggregate invested capital by hedge funds in the stock has also gone up to $3.22 billion by the end of the first quarter from $2.16 billion at the end of the fourth quarter. Even though the number of hedge fund positions has increased by just 1, the overall aggregate capital investment in the stock by hedge funds has increased by around 50% in the first quarter, a rather significant amount, although partly attributable to the strong first quarter performance of the stock, as mentioned above. This shows that the hedge fund sentiment is positive for Vipshop Holdings Ltd – ADR (NYSE:VIPS).
Insider activity is another metric we use to judge the viability of stocks, but there was no insider activity on Vipshop filed this year, hence the insider sentiment can be considered neutral.
Let’s take a closer look at the recent hedge fund activity on Vipshop Holdings Ltd – ADR (NYSE:VIPS).
How have hedgies been trading Vipshop Holdings Ltd – ADR (NYSE:VIPS)?
Heading into the second quarter, there was a change of 2% in the number of hedge fund positions in the stock. This 2% increase in the first quarter seems to be very low, but overall aggregate capital invested by these hedge funds in the stock has increased by a whopping 50% in the first quarter. This indicates that many hedge fund managers had strengthened their position in the stock significantly and some had opened a new position in the stock. Overall the hedge funds were optimistic on this stock.
According to Insider Monkey’s database, Tiger Global Management, managed by Chase Coleman, holds the largest position in Vipshop Holdings Ltd – ADR (NYSE:VIPS). Tiger Global Management holds 15.95 million shares valued at $469.6 million, comprising 5.1% of its 13F portfolio. Following Tiger Global Management is Ted Kang of Kylin Management, with 15.6 million shares valued at $459.9 million and accounting for an extremely bullish 41.3% of his 13F portfolio. Some of the remaining members of the smart money that hold long positions in the stock include John Burbank‘s Passport Capital, Stephen Mandel’s Lone Pine Capital, and J Kevin Kenny Jr’s Emerging Sovereign Group.
In general, hedge funds were bullish on Vipshop Holdings Ltd – ADR (NYSE:VIPS)’s stock and some hedge fund managers opted to invest big money in the stock in the first quarter. Leading the way is OZ Management, managed by Daniel S. Och, which opened the biggest position in the stock, buying 3.8 million shares worth $112 million at the end of the first quarter. Edmond M. Safra’s EMS Capital initiated a $15.9 million position by buying 540,000 shares during the quarter. The following funds were also among the new Vipshop investors: Jim Simons‘ Renaissance Technologies, Paul Marshall and Ian Wace’s Marshall Wace LLP, and John Thaler‘s JAT Capital Management.
Hedge funds opted to remain bullish on this stock in the first quarter and there was no insider activity filed during the same period. Analysts at various firms also remain bullish on this stock and recommend buying it despite the 20% drop since April. Based on a strongly positive hedge fund sentiment and bullish analyst calls, we recommend to buy this stock at the moment.
Disclosure: None
