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 have processed the filings of the more than 873 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 30th holdings, data that is available nowhere else. Should you consider Spotify Technology S.A. (NYSE:SPOT) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Spotify Technology S.A. (NYSE:SPOT) was in 48 hedge funds’ portfolios at the end of June. The all time high for this statistic is 67. SPOT has experienced an increase in support from the world’s most elite money managers lately. There were 46 hedge funds in our database with SPOT positions at the end of the first quarter. Our calculations also showed that SPOT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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.
Chase Coleman of Tiger Global
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. Keeping this in mind we’re going to go over the new hedge fund action regarding Spotify Technology S.A. (NYSE:SPOT).
Do Hedge Funds Think SPOT Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 48 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SPOT over the last 24 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, ARK Investment Management, managed by Catherine D. Wood, holds the number one position in Spotify Technology S.A. (NYSE:SPOT). ARK Investment Management has a $1.3206 billion position in the stock, comprising 2.5% of its 13F portfolio. The second largest stake is held by Tiger Global Management LLC, led by Chase Coleman, holding a $870.4 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish contain Noam Gottesman’s GLG Partners, Brett Barakett’s Tremblant Capital and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Greenlea Lane Capital allocated the biggest weight to Spotify Technology S.A. (NYSE:SPOT), around 11.89% of its 13F portfolio. Thunderbird Partners is also relatively very bullish on the stock, setting aside 8.39 percent of its 13F equity portfolio to SPOT.
As aggregate interest increased, key money managers were breaking ground themselves. Thunderbird Partners, managed by David Fear, established the biggest position in Spotify Technology S.A. (NYSE:SPOT). Thunderbird Partners had $93.5 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $31.7 million investment in the stock during the quarter. The following funds were also among the new SPOT investors: Robert Joseph Caruso’s Select Equity Group, Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital, and Steve Cohen’s Point72 Asset Management.
Let’s now take a look at hedge fund activity in other stocks similar to Spotify Technology S.A. (NYSE:SPOT). We will take a look at Public Storage (NYSE:PSA), Metlife Inc (NYSE:MET), Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), Biogen Inc. (NASDAQ:BIIB), Carvana Co. (NYSE:CVNA), ING Groep N.V. (NYSE:ING), and UBS Group AG (NYSE:UBS). This group of stocks’ market values are similar to SPOT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PSA | 27 | 1089757 | 1 |
| MET | 41 | 1056766 | 9 |
| VRTX | 60 | 2808847 | -8 |
| BIIB | 67 | 3116691 | 4 |
| CVNA | 63 | 8904829 | -1 |
| ING | 9 | 601603 | -1 |
| UBS | 15 | 176356 | -1 |
| Average | 40.3 | 2536407 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 40.3 hedge funds with bullish positions and the average amount invested in these stocks was $2536 million. That figure was $3497 million in SPOT’s case. Biogen Inc. (NASDAQ:BIIB) is the most popular stock in this table. On the other hand ING Groep N.V. (NYSE:ING) is the least popular one with only 9 bullish hedge fund positions. Spotify Technology S.A. (NYSE:SPOT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SPOT is 62.1. 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 through November 5th and beat the market again by 3.1 percentage points. Unfortunately SPOT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SPOT were disappointed as the stock returned 4.9% since the end of June (through 11/5) 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 many of these stocks already outperformed the market since 2019.
Follow Spotify Technology S.a. (NYSE:SPOT)
Follow Spotify Technology S.a. (NYSE:SPOT)
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Disclosure: None. This article was originally published at Insider Monkey.
