The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded JD.Com Inc (NASDAQ:JD) and determine whether the smart money was really smart about this stock.
JD.Com Inc (NASDAQ:JD) investors should pay attention to a decrease in enthusiasm from smart money of late. JD.Com Inc (NASDAQ:JD) was in 66 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 90. Our calculations also showed that JD 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. With all of this in mind let’s take a look at the key hedge fund action encompassing JD.Com Inc (NASDAQ:JD).
Bill Miller of Miller Value Partners
Do Hedge Funds Think JD Is A Good Stock To Buy Now?
At third quarter’s end, a total of 66 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from one quarter earlier. By comparison, 85 hedge funds held shares or bullish call options in JD a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Tiger Global Management LLC, managed by Chase Coleman, holds the most valuable position in JD.Com Inc (NASDAQ:JD). Tiger Global Management LLC has a $3.6943 billion position in the stock, comprising 7.1% of its 13F portfolio. Coming in second is Daniel Sundheim of D1 Capital Partners, with a $1.2851 billion position; the fund has 7.2% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish contain Philippe Laffont’s Coatue Management, Andreas Halvorsen’s Viking Global and Ken Fisher’s Fisher Asset Management. In terms of the portfolio weights assigned to each position Kylin Management allocated the biggest weight to JD.Com Inc (NASDAQ:JD), around 27.89% of its 13F portfolio. Kontiki Capital is also relatively very bullish on the stock, dishing out 24.66 percent of its 13F equity portfolio to JD.
Judging by the fact that JD.Com Inc (NASDAQ:JD) has faced falling interest from hedge fund managers, it’s safe to say that there was a specific group of funds that elected to cut their positions entirely in the third quarter. It’s worth mentioning that Gabriel Plotkin’s Melvin Capital Management cut the largest stake of the 750 funds watched by Insider Monkey, comprising about $379.1 million in stock. Benjamin A. Smith’s fund, Laurion Capital Management, also dumped its stock, about $257.4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 10 funds in the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as JD.Com Inc (NASDAQ:JD) but similarly valued. These stocks are CVS Health Corporation (NYSE:CVS), Target Corporation (NYSE:TGT), Anheuser-Busch InBev SA/NV (NYSE:BUD), Block, Inc. (NYSE:SQ), The Estee Lauder Companies Inc (NYSE:EL), Rio Tinto Group (NYSE:RIO), and HSBC Holdings plc (NYSE:HSBC). This group of stocks’ market valuations match JD’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CVS | 61 | 1060624 | -6 |
| TGT | 49 | 4349899 | -17 |
| BUD | 11 | 826303 | -7 |
| SQ | 98 | 8884931 | 4 |
| EL | 49 | 4137243 | -1 |
| RIO | 20 | 1330364 | -1 |
| HSBC | 10 | 196426 | -1 |
| Average | 42.6 | 2969399 | -4.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 42.6 hedge funds with bullish positions and the average amount invested in these stocks was $2969 million. That figure was $9057 million in JD’s case. Block, Inc. (NYSE:SQ) is the most popular stock in this table. On the other hand HSBC Holdings plc (NYSE:HSBC) is the least popular one with only 10 bullish hedge fund positions. JD.Com Inc (NASDAQ:JD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for JD is 48.8. 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 and still managed to beat the market by another 3.6 percentage points. Hedge funds were somewhat right about betting on JD as the stock returned 3.7% since the end of September (through January 31st) and outperformed the top 5 hedge fund stocks but not the market. This is a rare phenomenon as top hedge fund stocks usually beat the market over the long-term.
Follow Jd.com Inc (NASDAQ:JD)
Follow Jd.com Inc (NASDAQ:JD)
Suggested Articles:
- 20 Best Countries To Invest In Real Estate
- 10 Best Mid-Cap Stocks To Buy Now
- 10 Best Drone Stocks to Invest In
Disclosure: None. This article was originally published at Insider Monkey.
