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 Victorias Secret & Co. (NYSE:VSCO) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Is Victorias Secret & Co. (NYSE:VSCO) a sound investment now? Investors who are in the know were getting more optimistic. The number of long hedge fund bets advanced by 37 in recent months. Victorias Secret & Co. (NYSE:VSCO) was in 37 hedge funds’ portfolios at the end of September. Our calculations also showed that VSCO 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. Keeping this in mind let’s review the key hedge fund action surrounding Victorias Secret & Co. (NYSE:VSCO).
John Armitage of Egerton Capital
Do Hedge Funds Think VSCO Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 37 of the hedge funds tracked by Insider Monkey were long this stock, a change of 37 from the previous quarter. Below, you can check out the change in hedge fund sentiment towards VSCO over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Victorias Secret & Co. (NYSE:VSCO) was held by Lone Pine Capital, which reported holding $475.8 million worth of stock at the end of September. It was followed by Windacre Partnership with a $342 million position. Other investors bullish on the company included Candlestick Capital Management, Egerton Capital Limited, and Melvin Capital Management. In terms of the portfolio weights assigned to each position Barington Capital Group allocated the biggest weight to Victorias Secret & Co. (NYSE:VSCO) , around 9.57% of its 13F portfolio. Parsifal Capital Management is also relatively very bullish on the stock, setting aside 8.2 percent of its 13F equity portfolio to VSCO.
As industrywide interest jumped, key money managers have been driving this bullishness. Lone Pine Capital, initiated the largest position in Victorias Secret & Co. (NYSE:VSCO) . Lone Pine Capital had $475.8 million invested in the company at the end of the quarter. Snehal Amin’s Windacre Partnership also made a $342 million investment in the stock during the quarter. The other funds with brand new VSCO positions are Jack Woodruff’s Candlestick Capital Management, John Armitage’s Egerton Capital Limited, and Gabriel Plotkin’s Melvin Capital Management.
Let’s now review hedge fund activity in other stocks similar to Victorias Secret & Co. (NYSE:VSCO) . We will take a look at Wingstop Inc (NASDAQ:WING), Nomad Foods Limited (NYSE:NOMD), Select Medical Holdings Corporation (NYSE:SEM), Amedisys Inc (NASDAQ:AMED), JetBlue Airways Corporation (NASDAQ:JBLU), Herc Holdings Inc. (NYSE:HRI), and The Howard Hughes Corporation (NYSE:HHC). All of these stocks’ market caps match VSCO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WING | 23 | 213008 | -1 |
| NOMD | 23 | 272138 | -3 |
| SEM | 22 | 228726 | -2 |
| AMED | 25 | 271359 | -1 |
| JBLU | 31 | 370640 | 1 |
| HRI | 24 | 1535284 | 4 |
| HHC | 25 | 1469334 | 0 |
| Average | 24.7 | 622927 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.7 hedge funds with bullish positions and the average amount invested in these stocks was $623 million. That figure was $1962 million in VSCO’s case. JetBlue Airways Corporation (NASDAQ:JBLU) is the most popular stock in this table. On the other hand Select Medical Holdings Corporation (NYSE:SEM) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Victorias Secret & Co. (NYSE:VSCO) is more popular among hedge funds. Our overall hedge fund sentiment score for VSCO is 90. 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 VSCO as the stock returned 1% 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.
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Disclosure: None. This article was originally published at Insider Monkey.
