With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was Qiwi PLC (NASDAQ:QIWI).
Is QIWI stock a buy here? Hedge funds were selling. The number of long hedge fund positions retreated by 4 in recent months. Qiwi PLC (NASDAQ:QIWI) was in 5 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 15. Our calculations also showed that QIWI isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
David E. Shaw of D.E. Shaw
David E. Shaw of D.E. Shaw
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. 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. Keeping this in mind we're going to take a gander at the latest hedge fund action regarding Qiwi PLC (NASDAQ:QIWI).
Do Hedge Funds Think QIWI Is A Good Stock To Buy Now?
At first quarter's end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -44% from one quarter earlier. By comparison, 11 hedge funds held shares or bullish call options in QIWI a year ago. With hedge funds' capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Qiwi PLC (NASDAQ:QIWI), which was worth $11.5 million at the end of the fourth quarter. On the second spot was Millennium Management which amassed $3.8 million worth of shares. Citadel Investment Group, D E Shaw, and Arrowstreet 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 Renaissance Technologies allocated the biggest weight to Qiwi PLC (NASDAQ:QIWI), around 0.01% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, setting aside 0.0027 percent of its 13F equity portfolio to QIWI.
Seeing as Qiwi PLC (NASDAQ:QIWI) has experienced bearish sentiment from the smart money, logic holds that there is a sect of hedge funds who sold off their entire stakes in the first quarter. At the top of the heap, Minhua Zhang's Weld Capital Management said goodbye to the biggest investment of the "upper crust" of funds watched by Insider Monkey, worth close to $0.5 million in stock, and Michael Gelband's ExodusPoint Capital was right behind this move, as the fund said goodbye to about $0.2 million worth. These moves are interesting, as total hedge fund interest dropped by 4 funds in the first quarter.
Let's check out hedge fund activity in other stocks similar to Qiwi PLC (NASDAQ:QIWI). These stocks are Kadmon Holdings, Inc. (NASDAQ:KDMN), GAN Limited (NASDAQ:GAN), iHuman Inc. (NYSE:IH), Zepp Health Corporation (NYSE:ZEPP), Rafael Holdings, Inc. (NYSE:RFL), Cass Information Systems, Inc. (NASDAQ:CASS), and Provention Bio, Inc. (NASDAQ:PRVB). This group of stocks' market valuations are similar to QIWI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KDMN,24,286093,-7 GAN,11,64056,-11 IH,1,371,-3 ZEPP,5,4780,1 RFL,8,47979,1 CASS,9,25992,5 PRVB,11,55520,1 Average,9.9,69256,-1.9 [/table]
As you can see these stocks had an average of 9.9 hedge funds with bullish positions and the average amount invested in these stocks was $69 million. That figure was $19 million in QIWI's case. Kadmon Holdings, Inc. (NASDAQ:KDMN) is the most popular stock in this table. On the other hand iHuman Inc. (NYSE:IH) is the least popular one with only 1 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. Our overall hedge fund sentiment score for QIWI is 19.7. 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. 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 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 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately QIWI wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); QIWI investors were disappointed as the stock returned 4.3% since the end of March (through 6/18) 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 in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
