The latest 13F reporting period has come and gone, and 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, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Opendoor Technologies Inc. (NASDAQ:OPEN) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Opendoor Technologies Inc. (NASDAQ:OPEN) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 35 hedge funds’ portfolios at the end of September. Our calculations also showed that OPEN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare OPEN to other stocks including Fortune Brands Home & Security Inc (NYSE:FBHS), American Homes 4 Rent (NYSE:AMH), and Hasbro, Inc. (NASDAQ:HAS) to get a better sense of its popularity.
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 recent hedge fund action regarding Opendoor Technologies Inc. (NASDAQ:OPEN).
Brad Gerstner of Altimeter Capital
Do Hedge Funds Think OPEN Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 35 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in OPEN a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Sylebra Capital Management, managed by Daniel Patrick Gibson, holds the largest position in Opendoor Technologies Inc. (NASDAQ:OPEN). Sylebra Capital Management has a $401.5 million position in the stock, comprising 9% of its 13F portfolio. The second most bullish fund manager is Altimeter Capital Management, managed by Brad Gerstner, which holds a $275.1 million position; 2.2% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that hold long positions contain Daniel Sundheim’s D1 Capital Partners, Aaron Cowen’s Suvretta Capital Management and Catherine D. Wood’s ARK Investment Management. In terms of the portfolio weights assigned to each position Sylebra Capital Management allocated the biggest weight to Opendoor Technologies Inc. (NASDAQ:OPEN), around 9.04% of its 13F portfolio. Stamina Capital Management is also relatively very bullish on the stock, earmarking 7.98 percent of its 13F equity portfolio to OPEN.
Due to the fact that Opendoor Technologies Inc. (NASDAQ:OPEN) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few fund managers that slashed their full holdings by the end of the third quarter. Intriguingly, Alec Litowitz and Ross Laser’s Magnetar Capital dropped the biggest position of all the hedgies monitored by Insider Monkey, worth about $29.9 million in stock, and Doug Silverman and Alexander Klabin’s Senator Investment Group was right behind this move, as the fund cut about $17.7 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Opendoor Technologies Inc. (NASDAQ:OPEN) but similarly valued. These stocks are Fortune Brands Home & Security Inc (NYSE:FBHS), American Homes 4 Rent (NYSE:AMH), Hasbro, Inc. (NASDAQ:HAS), Tencent Music Entertainment Group (NYSE:TME), Mohawk Industries, Inc. (NYSE:MHK), GFL Environmental Inc. (NYSE:GFL), and Equitable Holdings, Inc. (NYSE:EQH). This group of stocks’ market valuations are closest to OPEN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FBHS | 23 | 344859 | -5 |
| AMH | 33 | 786048 | 2 |
| HAS | 25 | 185494 | -2 |
| TME | 24 | 256088 | -11 |
| MHK | 38 | 1263338 | -6 |
| GFL | 19 | 758568 | -4 |
| EQH | 46 | 1704423 | 1 |
| Average | 29.7 | 756974 | -3.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.7 hedge funds with bullish positions and the average amount invested in these stocks was $757 million. That figure was $1743 million in OPEN’s case. Equitable Holdings, Inc. (NYSE:EQH) is the most popular stock in this table. On the other hand GFL Environmental Inc. (NYSE:GFL) is the least popular one with only 19 bullish hedge fund positions. Opendoor Technologies Inc. (NASDAQ:OPEN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OPEN is 64.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 beat the market again by 3.6 percentage points. Unfortunately, OPEN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on OPEN were disappointed as the stock returned -51.6% since the end of September (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.
