Should You Buy Zillow Group, Inc. (Z)?

Is Zillow Group, Inc. (NASDAQ:Z) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Zillow Group, Inc. (NASDAQ:Z) shares haven’t seen a lot of action during the fourth quarter. Overall, hedge fund sentiment was unchanged. The stock was in 26 hedge funds’ portfolios at the end of September. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Pilgrim’s Pride Corporation (NASDAQ:PPC), Align Technology, Inc. (NASDAQ:ALGN), and CIT Group Inc. (NYSE:CIT) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Now, we’re going to analyze the latest action surrounding Zillow Group, Inc. (NASDAQ:Z).

How have hedgies been trading Zillow Group, Inc. (NASDAQ:Z)?

At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, unchanged from the second quarter of 2016. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Eashwar Krishnan’s Tybourne Capital Management has the biggest position in Zillow Group, Inc. (NASDAQ:Z), worth close to $153.1 million, corresponding to 7.6% of its total 13F portfolio. Sitting at the No. 2 spot is PAR Capital Management, led by Paul Reeder and Edward Shapiro, holding a $134.5 million position; 1.9% of its 13F portfolio is allocated to the company. Remaining peers that are bullish consist of Christopher R. Hansen’s Valiant Capital, Paul Reeder and Edward Shapiro’s PAR Capital Management and Seymour Sy Kaufman and Michael Stark’s Crosslink Capital.