Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Meta Platforms, Inc. (NASDAQ:FB) based on that data and determine whether they were really smart about the stock.
Meta Platforms, Inc. (NASDAQ:FB) investors should be aware of a decrease in enthusiasm from smart money of late. Meta Platforms, Inc. (NASDAQ:FB) was in 248 hedge funds’ portfolios at the end of September. The all time high for this statistic is 266. There were 266 hedge funds in our database with FB positions at the end of the second quarter. Our calculations also showed that FB dropped to #2 among the 30 most popular stocks among hedge funds (click for Q2 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. Now we’re going to take a look at the new hedge fund action regarding Meta Platforms, Inc. (NASDAQ:FB).
Boykin Curry of Eagle Capital
Do Hedge Funds Think FB Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 248 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in FB over the last 25 quarters. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Among these funds, Citadel Investment Group held the most valuable stake in Meta Platforms, Inc. (NASDAQ:FB), which was worth $4806.3 million at the end of the third quarter. On the second spot was Fisher Asset Management which amassed $2576.2 million worth of shares. Eagle Capital Management, Fundsmith LLP, and GQG Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Arrow Capital Management allocated the biggest weight to Meta Platforms, Inc. (NASDAQ:FB), around 31.56% of its 13F portfolio. Immersion Capital is also relatively very bullish on the stock, earmarking 27.04 percent of its 13F equity portfolio to FB.
Seeing as Meta Platforms, Inc. (NASDAQ:FB) has faced falling interest from hedge fund managers, it’s easy to see that there were a few money managers who sold off their positions entirely in the third quarter. It’s worth mentioning that Matthew Stadelman’s Diamond Hill Capital cut the biggest position of the 750 funds followed by Insider Monkey, totaling about $595.6 million in call options. Michael Burry’s fund, Scion Asset Management, also dumped its call options, about $327.3 million worth. These moves are interesting, as aggregate hedge fund interest fell by 18 funds in the third quarter.
Let’s go over hedge fund activity in other stocks similar to Meta Platforms, Inc. (NASDAQ:FB). We will take a look at Tesla Inc. (NASDAQ:TSLA), Berkshire Hathaway Inc. (NYSE:BRK-B), Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM), NVIDIA Corporation (NASDAQ:NVDA), JPMorgan Chase & Co. (NYSE:JPM), Visa Inc (NYSE:V), and Johnson & Johnson (NYSE:JNJ). All of these stocks’ market caps resemble FB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TSLA | 60 | 10645154 | 0 |
| BRK-B | 106 | 19463815 | -10 |
| TSM | 67 | 9511459 | 3 |
| NVDA | 83 | 10050216 | -3 |
| JPM | 101 | 5635067 | -7 |
| V | 143 | 26169435 | -19 |
| JNJ | 88 | 6871782 | 0 |
| Average | 92.6 | 12620990 | -5.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 92.6 hedge funds with bullish positions and the average amount invested in these stocks was $12621 million. That figure was $38570 million in FB’s case. Visa Inc (NYSE:V) is the most popular stock in this table. On the other hand Tesla Inc. (NASDAQ:TSLA) is the least popular one with only 60 bullish hedge fund positions. Compared to these stocks Meta Platforms, Inc. (NASDAQ:FB) is more popular among hedge funds. Our overall hedge fund sentiment score for FB is 97.5. 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 beat the market by 3.6 percentage points. Unfortunately FB wasn’t nearly as successful as these 5 stocks and hedge funds that were betting on FB were disappointed as the stock returned -7.7% since the end of the third quarter (through 1/31) 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 all of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
