The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Zillow Group Inc (NASDAQ:Z).
Zillow Group Inc (NASDAQ:Z) has seen a decrease in enthusiasm from smart money recently. Zillow Group Inc (NASDAQ:Z) was in 67 hedge funds’ portfolios at the end of September. The all time high for this statistic is 83. Our calculations also showed that Z isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s view the key hedge fund action regarding Zillow Group Inc (NASDAQ:Z).
Philippe Laffont of Coatue Management
Do Hedge Funds Think Z Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 67 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -12% from one quarter earlier. On the other hand, there were a total of 69 hedge funds with a bullish position in Z a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Zillow Group Inc (NASDAQ:Z) was held by ARK Investment Management, which reported holding $994.8 million worth of stock at the end of September. It was followed by SRS Investment Management with a $643.8 million position. Other investors bullish on the company included Coatue Management, SoMa Equity Partners, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Valiant Capital allocated the biggest weight to Zillow Group Inc (NASDAQ:Z), around 9.22% of its 13F portfolio. SRS Investment Management is also relatively very bullish on the stock, setting aside 9.05 percent of its 13F equity portfolio to Z.
Seeing as Zillow Group Inc (NASDAQ:Z) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of money managers that slashed their full holdings heading into Q4. Intriguingly, Panayotis Takis Sparaggis’s Alkeon Capital Management dropped the biggest investment of all the hedgies tracked by Insider Monkey, worth an estimated $122.2 million in stock, and Josh Resnick’s Jericho Capital Asset Management was right behind this move, as the fund said goodbye to about $101.4 million worth. These moves are interesting, as total hedge fund interest fell by 9 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks similar to Zillow Group Inc (NASDAQ:Z). These stocks are Monolithic Power Systems, Inc. (NASDAQ:MPWR), Xylem Inc (NYSE:XYL), Hormel Foods Corporation (NYSE:HRL), Imperial Oil Limited (NYSE:IMO), Bio-Rad Laboratories, Inc. (NYSE:BIO), Qualtrics International Inc. (NASDAQ:XM), and Warner Music Group Corp. (NASDAQ:WMG). All of these stocks’ market caps match Z’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MPWR | 28 | 799034 | -6 |
| XYL | 22 | 821321 | -1 |
| HRL | 29 | 476824 | 5 |
| IMO | 10 | 99009 | -5 |
| BIO | 38 | 1442180 | -3 |
| XM | 26 | 1694438 | -11 |
| WMG | 28 | 972824 | -1 |
| Average | 25.9 | 900804 | -3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.9 hedge funds with bullish positions and the average amount invested in these stocks was $901 million. That figure was $4251 million in Z’s case. Bio-Rad Laboratories, Inc. (NYSE:BIO) is the most popular stock in this table. On the other hand Imperial Oil Limited (NYSE:IMO) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Zillow Group Inc (NASDAQ:Z) is more popular among hedge funds. Our overall hedge fund sentiment score for Z is 70.2. 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 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately Z wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on Z were disappointed as the stock returned -38.4% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Zillow Inc (NASDAQ:Z)
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Disclosure: None. This article was originally published at Insider Monkey.
