Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Wix.Com Ltd (NASDAQ:WIX).
Is WIX stock a buy? Wix.Com Ltd (NASDAQ:WIX) has seen an increase in hedge fund sentiment lately. Wix.Com Ltd (NASDAQ:WIX) was in 37 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 36. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that WIX isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In today’s marketplace there are several gauges investors employ to evaluate publicly traded companies. A couple of the most underrated gauges are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the elite money managers can outperform their index-focused peers by a solid margin (see the details here).
John Overdeck of Two Sigma Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy 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 check out the recent hedge fund action regarding Wix.Com Ltd (NASDAQ:WIX).
Do Hedge Funds Think WIX Is A Good Stock To Buy Now?
At Q4’s end, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards WIX over the last 22 quarters. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
More specifically, Steadfast Capital Management was the largest shareholder of Wix.Com Ltd (NASDAQ:WIX), with a stake worth $282.2 million reported as of the end of December. Trailing Steadfast Capital Management was Renaissance Technologies, which amassed a stake valued at $105.6 million. Arrowstreet Capital, Two Sigma Advisors, and SQN Investors 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 Blackcrane Capital allocated the biggest weight to Wix.Com Ltd (NASDAQ:WIX), around 20.79% of its 13F portfolio. Noked Capital is also relatively very bullish on the stock, setting aside 13.01 percent of its 13F equity portfolio to WIX.
There weren’t any hedge funds initiating brand new positions in the stock during the fourth quarter.
Let’s go over hedge fund activity in other stocks similar to Wix.Com Ltd (NASDAQ:WIX). These stocks are Liberty Global plc (NASDAQ:LBTYA), Black Knight, Inc. (NYSE:BKI), Natura &Co Holding S.A. (NYSE:NTCO), Sunrun Inc (NASDAQ:RUN), iQIYI, Inc. (NASDAQ:IQ), VICI Properties Inc. (NYSE:VICI), and Principal Financial Group Inc (NYSE:PFG). All of these stocks’ market caps are closest to WIX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LBTYA | 36 | 1123404 | 1 |
| BKI | 44 | 994940 | 3 |
| NTCO | 4 | 82302 | 0 |
| RUN | 48 | 3008231 | 19 |
| IQ | 30 | 1048707 | 12 |
| VICI | 38 | 970234 | -2 |
| PFG | 26 | 117451 | 1 |
| Average | 32.3 | 1049324 | 4.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.3 hedge funds with bullish positions and the average amount invested in these stocks was $1049 million. That figure was $1000 million in WIX’s case. Sunrun Inc (NASDAQ:RUN) is the most popular stock in this table. On the other hand Natura &Co Holding S.A. (NYSE:NTCO) is the least popular one with only 4 bullish hedge fund positions. Wix.Com Ltd (NASDAQ:WIX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WIX is 73.5. 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 gained 7.9% in 2021 through April 1st and still beat the market by 0.4 percentage points. Hedge funds were also right about betting on WIX as the stock returned 17.3% since the end of Q4 (through 4/1) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Wix.com Ltd. (NASDAQ:WIX)
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Disclosure: None. This article was originally published at Insider Monkey.
