We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed in recent years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that certain hedge funds do have great stock picking skills (and we can identify these hedge funds in advance pretty accurately), so let’s take a glance at the smart money sentiment towards Qiwi PLC (NASDAQ:QIWI).
Is Qiwi PLC (NASDAQ:QIWI) worth your attention right now? Hedge funds are getting less bullish. The number of long hedge fund bets decreased by 5 lately. Our calculations also showed that QIWI isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
Kerr Neilson of Platinum Asset Management
We leave no stone unturned when looking for the next great investment idea. For example, COVID-19 pandemic is still the main driver of stock prices. So we are checking out this trader’s corona catalyst trades. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to review the key hedge fund action surrounding Qiwi PLC (NASDAQ:QIWI).
What does smart money think about Qiwi PLC (NASDAQ:QIWI)?
At Q4’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -33% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in QIWI over the last 18 quarters. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the biggest position in Qiwi PLC (NASDAQ:QIWI), worth close to $35.2 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is Melqart Asset Management, managed by Michel Massoud, which holds a $20.6 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Kerr Neilson’s Platinum Asset Management and Claes Fornell’s CSat Investment Advisory. In terms of the portfolio weights assigned to each position Melqart Asset Management allocated the biggest weight to Qiwi PLC (NASDAQ:QIWI), around 1.73% of its 13F portfolio. CSat Investment Advisory is also relatively very bullish on the stock, earmarking 0.29 percent of its 13F equity portfolio to QIWI.
Since Qiwi PLC (NASDAQ:QIWI) has faced bearish sentiment from the smart money, logic holds that there was a specific group of funds who were dropping their full holdings last quarter. It’s worth mentioning that David Halpert’s Prince Street Capital Management said goodbye to the largest position of the “upper crust” of funds tracked by Insider Monkey, totaling about $2.3 million in stock, and Ravee Mehta’s Nishkama Capital was right behind this move, as the fund dropped about $1.5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 5 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Qiwi PLC (NASDAQ:QIWI). These stocks are Green Dot Corporation (NYSE:GDOT), Encore Wire Corporation (NASDAQ:WIRE), Matthews International Corp (NASDAQ:MATW), and Talend S.A. (NASDAQ:TLND). This group of stocks’ market valuations resemble QIWI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GDOT | 23 | 172718 | 0 |
| WIRE | 13 | 48294 | -4 |
| MATW | 9 | 43937 | -1 |
| TLND | 24 | 438381 | -5 |
| Average | 17.25 | 175833 | -2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $176 million. That figure was $76 million in QIWI’s case. Talend S.A. (NASDAQ:TLND) is the most popular stock in this table. On the other hand Matthews International Corp (NASDAQ:MATW) is the least popular one with only 9 bullish hedge fund positions. Qiwi PLC (NASDAQ:QIWI) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 1.0% in 2020 through May 1st but beat the market by 12.9 percentage points. Unfortunately QIWI wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); QIWI investors were disappointed as the stock returned -31.4% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
