The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Netflix, Inc. (NASDAQ:NFLX) based on those filings.
Netflix, Inc. (NASDAQ:NFLX) was in 110 hedge funds’ portfolios at the end of March. The all time high for this statistic is 116. NFLX has experienced a decrease in support from the world’s most elite money managers lately. There were 116 hedge funds in our database with NFLX positions at the end of the fourth quarter. Our calculations also showed that NFLX ranked 15th among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Andreas Halvorsen of Viking Global
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Do Hedge Funds Think NFLX Is A Good Stock To Buy Now?
At Q1’s end, a total of 110 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards NFLX over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Citadel Investment Group held the most valuable stake in Netflix, Inc. (NASDAQ:NFLX), which was worth $2151.4 million at the end of the fourth quarter. On the second spot was Fisher Asset Management which amassed $1999.6 million worth of shares. SRS Investment Management, Matrix Capital Management, and Lone Pine Capital 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 Ariose Capital allocated the biggest weight to Netflix, Inc. (NASDAQ:NFLX), around 27.15% of its 13F portfolio. SRS Investment Management is also relatively very bullish on the stock, designating 16.95 percent of its 13F equity portfolio to NFLX.
Judging by the fact that Netflix, Inc. (NASDAQ:NFLX) has experienced bearish sentiment from the smart money, it’s easy to see that there were a few fund managers who sold off their entire stakes by the end of the first quarter. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors cut the biggest investment of the 750 funds tracked by Insider Monkey, worth about $249.4 million in stock, and Aaron Cowen’s Suvretta Capital Management was right behind this move, as the fund cut about $207.9 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 6 funds by the end of the first quarter.
Let’s also examine hedge fund activity in other stocks similar to Netflix, Inc. (NASDAQ:NFLX). These stocks are Adobe Inc. (NASDAQ:ADBE), The Coca-Cola Company (NYSE:KO), Cisco Systems, Inc. (NASDAQ:CSCO), Toyota Motor Corporation (NYSE:TM), AT&T Inc. (NYSE:T), Abbott Laboratories (NYSE:ABT), and NIKE, Inc. (NYSE:NKE). This group of stocks’ market values are closest to NFLX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ADBE | 107 | 12111692 | -7 |
| KO | 61 | 24903946 | -1 |
| CSCO | 59 | 5194074 | -1 |
| TM | 18 | 824174 | 7 |
| T | 63 | 2701777 | 5 |
| ABT | 65 | 5136552 | 1 |
| NKE | 78 | 5176711 | -4 |
| Average | 64.4 | 8006989 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 64.4 hedge funds with bullish positions and the average amount invested in these stocks was $8007 million. That figure was $14159 million in NFLX’s case. Adobe Inc. (NASDAQ:ADBE) is the most popular stock in this table. On the other hand Toyota Motor Corporation (NYSE:TM) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Netflix, Inc. (NASDAQ:NFLX) is more popular among hedge funds. Our overall hedge fund sentiment score for NFLX is 91.4. 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 25.8% in 2021 through August 6th and still beat the market by 6.7 percentage points. Unfortunately NFLX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NFLX were disappointed as the stock returned -0.2% since the end of the first quarter (through 8/6) 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 most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
