Was The Smart Money Right About DoorDash, Inc. (DASH)?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on DoorDash, Inc. (NYSE:DASH).

Is DoorDash, Inc. (NYSE:DASH) a buy, sell, or hold? The best stock pickers were becoming hopeful. The number of long hedge fund bets improved by 7 recently. DoorDash, Inc. (NYSE:DASH) was in 45 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 38. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that DASH isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 38 hedge funds in our database with DASH holdings at the end of March.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Philippe Laffont of Coatue Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, billionaire John Paulson is loading up on the miners, so we are checking out stock pitches like this mining stock. 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. 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 homepage. With all of this in mind let’s review the fresh hedge fund action regarding DoorDash, Inc. (NYSE:DASH).

Do Hedge Funds Think DASH Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 45 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards DASH over the last 24 quarters. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Chase Coleman’s Tiger Global Management LLC has the largest position in DoorDash, Inc. (NYSE:DASH), worth close to $1.9462 billion, accounting for 3.6% of its total 13F portfolio. On Tiger Global Management LLC’s heels is Coatue Management, led by Philippe Laffont, holding a $1.7225 billion position; 6.7% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors with similar optimism include Lone Pine Capital, Christopher Lyle’s SCGE Management and Alex Sacerdote’s Whale Rock Capital Management. In terms of the portfolio weights assigned to each position Himension Capital allocated the biggest weight to DoorDash, Inc. (NYSE:DASH), around 19.85% of its 13F portfolio. Darsana Capital Partners is also relatively very bullish on the stock, dishing out 9.38 percent of its 13F equity portfolio to DASH.

With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Melvin Capital Management, managed by Gabriel Plotkin, established the largest position in DoorDash, Inc. (NYSE:DASH). Melvin Capital Management had $329.9 million invested in the company at the end of the quarter. Josh Resnick’s Jericho Capital Asset Management also initiated a $279.4 million position during the quarter. The other funds with brand new DASH positions are Brandon Haley’s Holocene Advisors, Steve Cohen’s Point72 Asset Management, and Mark Wolfson and Jamie Alexander’s Jasper Ridge Partners.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as DoorDash, Inc. (NYSE:DASH) but similarly valued. These stocks are Emerson Electric Co. (NYSE:EMR), The Progressive Corporation (NYSE:PGR), Humana Inc (NYSE:HUM), KE Holdings Inc (NYSE:BEKE), CrowdStrike Holdings, Inc. (NASDAQ:CRWD), NXP Semiconductors NV (NASDAQ:NXPI), and Honda Motor Co Ltd (NYSE:HMC). This group of stocks’ market caps are similar to DASH’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 43.9 hedge funds with bullish positions and the average amount invested in these stocks was $2449 million. That figure was $8924 million in DASH’s case. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is the most popular stock in this table. On the other hand Honda Motor Co Ltd (NYSE:HMC) is the least popular one with only 10 bullish hedge fund positions. DoorDash, Inc. (NYSE:DASH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DASH is 71.3. 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 29.6% in 2021 through November 5th and still beat the market by 3.1 percentage points. Hedge funds were also right about betting on DASH as the stock returned 11.4% since the end of Q2 (through 11/5) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.