Did Hedge Funds Make The Right Call On Momo Inc (MOMO) ?


Insider Monkey has processed quite a few 13F filings of hedge funds and profitable worth traders to create an in depth database of hedge fund holdings. The 13F filings present the hedge funds’ and profitable traders’ positions as of the top of the primary quarter. You will discover articles about a person hedge fund’s trades on quite a few monetary information web sites. Nevertheless, on this article we’ll check out their collective strikes over the past 4.5 years and analyze what the good cash thinks of Momo Inc (NASDAQ:MOMO) based mostly on that knowledge and decide whether or not they have been actually good in regards to the inventory.

Momo Inc (NASDAQ:MOMO) was in 25 hedge funds’ portfolios on the finish of the primary quarter of 2020. MOMO has seen a lower in enthusiasm from good cash in latest months. There have been 38 hedge funds in our database with MOMO positions on the finish of the earlier quarter. Our calculations additionally confirmed that MOMO is not among the many 30 hottest shares amongst hedge funds (click on for Q1 rankings and see the video for a fast have a look at the highest 5 shares). Video: Watch our video in regards to the prime 5 hottest hedge fund shares.

Why will we pay any consideration in any respect to hedge fund sentiment? Our analysis has proven {that a} choose group of hedge fund holdings outperformed the S&P 500 ETFs by 58 proportion factors since March 2017 (see the small print right here). We have been additionally capable of establish upfront a choose group of hedge fund holdings that’ll considerably underperform the market. Now we have been monitoring and sharing the record of those shares since February 2017 they usually misplaced 36% by Could 18th. That is why we imagine hedge fund sentiment is a particularly helpful indicator that traders ought to take note of.

Mark Kingdon – Kingdon Capital

At Insider Monkey we scour a number of sources to uncover the subsequent nice funding thought. For instance, authorized marijuana is likely one of the quickest rising industries proper now, so we’re trying out inventory pitches like “the Starbucks of hashish” to establish the subsequent tenbagger. We undergo lists just like the 10 most worthwhile firms on the earth to choose the very best large-cap shares to purchase. Though we advocate positions in solely a tiny fraction of the businesses we analyze, we try as many shares as we will. We learn hedge fund investor letters and take heed to inventory pitches at hedge fund conferences. Hedge fund sentiment in the direction of Tesla reached its all time excessive on the finish of 2019 and Tesla shares greater than tripled this 12 months. We try to establish different EV revolution winners, so you probably have any good concepts ship us an electronic mail. Now we’ll take a gander on the newest hedge fund motion encompassing Momo Inc (NASDAQ:MOMO).

What does good cash take into consideration Momo Inc (NASDAQ:MOMO)?

At Q1’s finish, a complete of 25 of the hedge funds tracked by Insider Monkey held lengthy positions on this inventory, a change of -34% from one quarter earlier. The graph under shows the variety of hedge funds with bullish place in MOMO over the past 18 quarters. With hedge funds’ positions present process their regular ebb and circulation, there exists a choose group of noteworthy hedge fund managers who have been upping their holdings meaningfully (or already gathered giant positions).

Is MOMO A Good Inventory To Purchase?

The biggest stake in Momo Inc (NASDAQ:MOMO) was held by Renaissance Applied sciences, which reported holding $289.Four million price of inventory on the finish of September. It was adopted by Platinum Asset Administration with a $82.1 million place. Different traders bullish on the corporate included Arrowstreet Capital, Yiheng Capital, and Kylin Administration. By way of the portfolio weights assigned to every place Kylin Administration allotted the most important weight to Momo Inc (NASDAQ:MOMO), round 8.21% of its 13F portfolio. Dalton Investments can also be comparatively very bullish on the inventory, earmarking 7.78 p.c of its 13F fairness portfolio to MOMO.

As a consequence of the truth that Momo Inc (NASDAQ:MOMO) has skilled falling curiosity from the combination hedge fund trade, we will see that there exists a choose few hedge funds who bought off their total stakes by the top of the primary quarter. It is price mentioning that Noam Gottesman’s GLG Companions lower the most important place of all of the hedgies adopted by Insider Monkey, price about $25.Four million in inventory. Fang Zheng’s fund, Keywise Capital Administration, additionally stated goodbye to its inventory, about $24.6 million price. These transactions are essential to notice, as whole hedge fund curiosity was lower by 13 funds by the top of the primary quarter.

Let’s go over hedge fund exercise in different shares – not essentially in the identical trade as Momo Inc (NASDAQ:MOMO) however equally valued. These shares are Pilgrim’s Delight Company (NASDAQ:PPC), Woori Monetary Group Inc. (NYSE:WF), Quanta Companies Inc (NYSE:PWR), and Etsy Inc (NASDAQ:ETSY). This group of shares’ market caps match MOMO’s market cap.

[table] Ticker, No of HFs with positions, Whole Worth of HF Positions (x1000), Change in HF Place PPC,18,122135,-6 WF,3,2382,zero PWR,28,1509183,-16 ETSY,38,712742,-Eight Common,21.75,586611,-7.5 [/table]

View desk right here in the event you expertise formatting points.

As you possibly can see these shares had a mean of 21.75 hedge funds with bullish positions and the typical quantity invested in these shares was $587 million. That determine was $585 million in MOMO’s case. Etsy Inc (NASDAQ:ETSY) is the most well-liked inventory on this desk. However Woori Monetary Group Inc. (NYSE:WF) is the least fashionable one with solely Three bullish hedge fund positions. Momo Inc (NASDAQ:MOMO) is just not the most well-liked inventory on this group however hedge fund curiosity continues to be above common. This can be a barely constructive sign however we might quite spend our time researching shares that hedge funds are piling on. Our calculations confirmed that prime 10 hottest shares amongst hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 proportion factors. These shares gained 12.3% in 2020 by June 30th however beat the market by 15.5 proportion factors. Sadly MOMO wasn’t practically as fashionable as these 10 shares and hedge funds that have been betting on MOMO have been disillusioned because the inventory returned -16.5% throughout the identical time interval and underperformed the market. In case you are occupied with investing in giant cap shares with enormous upside potential, you must try the highest 10 hottest shares amongst hedge funds as many of those shares already outperformed the market thus far this 12 months.

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Disclosure: None. This text was initially revealed at Insider Monkey.

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