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. Insider Monkey finished processing 866 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Stitch Fix, Inc. (NASDAQ:SFIX).
Is Stitch Fix, Inc. (NASDAQ:SFIX) going to take off soon? The best stock pickers were getting less bullish. The number of long hedge fund bets shrunk by 4 lately. Stitch Fix, Inc. (NASDAQ:SFIX) was in 28 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 32. Our calculations also showed that SFIX isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Bill Miller of Miller Value Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. Now let’s review the fresh hedge fund action regarding Stitch Fix, Inc. (NASDAQ:SFIX).
Do Hedge Funds Think SFIX Is A Good Stock To Buy Now?
At first quarter’s end, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards SFIX over the last 23 quarters. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, D E Shaw, managed by D. E. Shaw, holds the biggest position in Stitch Fix, Inc. (NASDAQ:SFIX). D E Shaw has a $131.2 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Philippe Laffont of Coatue Management, with a $80.4 million position; 0.4% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish consist of Bill Miller’s Miller Value Partners, Renaissance Technologies and Mario Cibelli’s Marathon Partners. In terms of the portfolio weights assigned to each position Marathon Partners allocated the biggest weight to Stitch Fix, Inc. (NASDAQ:SFIX), around 12.51% of its 13F portfolio. Harspring Capital Management is also relatively very bullish on the stock, dishing out 1.97 percent of its 13F equity portfolio to SFIX.
Because Stitch Fix, Inc. (NASDAQ:SFIX) has witnessed bearish sentiment from the aggregate hedge fund industry, logic holds that there was a specific group of hedgies that elected to cut their positions entirely last quarter. It’s worth mentioning that Daniel S. Och’s OZ Management said goodbye to the largest stake of all the hedgies tracked by Insider Monkey, totaling about $12.7 million in stock, and Noam Gottesman’s GLG Partners was right behind this move, as the fund cut about $4.4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 4 funds last quarter.
Let’s now review hedge fund activity in other stocks similar to Stitch Fix, Inc. (NASDAQ:SFIX). We will take a look at Varonis Systems Inc (NASDAQ:VRNS), Travel + Leisure Co. (NYSE:TNL), Shell Midstream Partners LP (NYSE:SHLX), Daqo New Energy Corp (NYSE:DQ), The Howard Hughes Corporation (NYSE:HHC), Herbalife Nutrition Ltd. (NYSE:HLF), and Bank OZK (NASDAQ:OZK). All of these stocks’ market caps are similar to SFIX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VRNS | 32 | 381944 | 2 |
| TNL | 30 | 745794 | 1 |
| SHLX | 4 | 27451 | -3 |
| DQ | 17 | 129832 | -1 |
| HHC | 27 | 1619423 | 0 |
| HLF | 40 | 1994608 | -1 |
| OZK | 25 | 237162 | 5 |
| Average | 25 | 733745 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $734 million. That figure was $466 million in SFIX’s case. Herbalife Nutrition Ltd. (NYSE:HLF) is the most popular stock in this table. On the other hand Shell Midstream Partners LP (NYSE:SHLX) is the least popular one with only 4 bullish hedge fund positions. Stitch Fix, Inc. (NASDAQ:SFIX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SFIX is 60.6. 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. 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 24% in 2021 through July 9th and still beat the market by 6.7 percentage points. Hedge funds were also right about betting on SFIX as the stock returned 22.4% since the end of Q1 (through 7/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Stitch Fix Inc. (NASDAQ:SFIX)
Follow Stitch Fix Inc. (NASDAQ:SFIX)
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Disclosure: None. This article was originally published at Insider Monkey.
