We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Peltz’s recent General Electric losses). However, it is still good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Match Group, Inc. (NASDAQ:MTCH).
Match Group, Inc. (NASDAQ:MTCH) has seen an increase in hedge fund interest recently. Our calculations also showed that MTCH isn’t among the 30 most popular stocks among hedge funds.
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 flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to go over the latest hedge fund action regarding Match Group, Inc. (NASDAQ:MTCH).
How have hedgies been trading Match Group, Inc. (NASDAQ:MTCH)?
At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 12% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards MTCH over the last 13 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Among these funds, D E Shaw held the most valuable stake in Match Group, Inc. (NASDAQ:MTCH), which was worth $171.1 million at the end of the third quarter. On the second spot was Whale Rock Capital Management which amassed $154.6 million worth of shares. Moreover, Jericho Capital Asset Management, EMS Capital, and Two Sigma Advisors were also bullish on Match Group, Inc. (NASDAQ:MTCH), allocating a large percentage of their portfolios to this stock.
Consequently, key money managers have jumped into Match Group, Inc. (NASDAQ:MTCH) headfirst. Renaissance Technologies, managed by Jim Simons, assembled the largest position in Match Group, Inc. (NASDAQ:MTCH). Renaissance Technologies had $49 million invested in the company at the end of the quarter. Bruce Garelick’s Garelick Capital Partners also initiated a $31.3 million position during the quarter. The other funds with brand new MTCH positions are Eduardo Costa’s Calixto Global Investors, Lee Ainslie’s Maverick Capital, and D. E. Shaw’s D E Shaw.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Match Group, Inc. (NASDAQ:MTCH) but similarly valued. These stocks are WellCare Health Plans, Inc. (NYSE:WCG), D.R. Horton, Inc. (NYSE:DHI), American Water Works Company, Inc. (NYSE:AWK), and KLA-Tencor Corporation (NASDAQ:KLAC). All of these stocks’ market caps are similar to MTCH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WCG | 35 | 1713127 | 5 |
| DHI | 49 | 2084932 | 13 |
| AWK | 20 | 503256 | 1 |
| KLAC | 27 | 909190 | 1 |
| Average | 32.75 | 1302626 | 5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.75 hedge funds with bullish positions and the average amount invested in these stocks was $1.30 billion. That figure was $938 million in MTCH’s case. D.R. Horton, Inc. (NYSE:DHI) is the most popular stock in this table. On the other hand American Water Works Company, Inc. (NYSE:AWK) is the least popular one with only 20 bullish hedge fund positions. Match Group, Inc. (NASDAQ:MTCH) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard DHI might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
