The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Waitr Holdings Inc. (NASDAQ:WTRH).
Is WTRH a good stock to buy now? Waitr Holdings Inc. (NASDAQ:WTRH) investors should pay attention to a decrease in enthusiasm from smart money lately. Waitr Holdings Inc. (NASDAQ:WTRH) was in 13 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 22. Our calculations also showed that WTRH isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Christian Leone of Luxor Capital Group
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Keeping this in mind we're going to take a look at the fresh hedge fund action surrounding Waitr Holdings Inc. (NASDAQ:WTRH).
Do Hedge Funds Think WTRH Is A Good Stock To Buy Now?
At the end of September, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -24% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards WTRH over the last 21 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
The largest stake in Waitr Holdings Inc. (NASDAQ:WTRH) was held by Luxor Capital Group, which reported holding $32.8 million worth of stock at the end of September. It was followed by Leucadia National with a $12.5 million position. Other investors bullish on the company included Tenzing Global Investors, G2 Investment Partners Management, and Granite Point Capital. In terms of the portfolio weights assigned to each position Leucadia National allocated the biggest weight to Waitr Holdings Inc. (NASDAQ:WTRH), around 8.91% of its 13F portfolio. Tenzing Global Investors is also relatively very bullish on the stock, setting aside 1.52 percent of its 13F equity portfolio to WTRH.
Since Waitr Holdings Inc. (NASDAQ:WTRH) has experienced falling interest from the smart money, it's safe to say that there were a few hedge funds who sold off their positions entirely last quarter. At the top of the heap, Richard Driehaus's Driehaus Capital cut the biggest position of the "upper crust" of funds monitored by Insider Monkey, totaling an estimated $5 million in stock, and Greg Eisner's Engineers Gate Manager was right behind this move, as the fund sold off about $0.6 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 4 funds last quarter.
Let's go over hedge fund activity in other stocks similar to Waitr Holdings Inc. (NASDAQ:WTRH). We will take a look at iBio, Inc. (NYSE:IBIO), The First of Long Island Corporation (NASDAQ:FLIC), Hoegh LNG Partners LP (NYSE:HMLP), Customers Bancorp Inc (NYSE:CUBI), IMARA Inc. (NASDAQ:IMRA), Alliance Resource Partners, L.P. (NASDAQ:ARLP), and Dynex Capital Inc (NYSE:DX). All of these stocks' market caps are similar to WTRH's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IBIO,3,939,1 FLIC,10,22272,-1 HMLP,5,12459,0 CUBI,10,12964,-5 IMRA,5,78482,-1 ARLP,4,16859,0 DX,8,7739,4 Average,6.4,21673,-0.3 [/table]
As you can see these stocks had an average of 6.4 hedge funds with bullish positions and the average amount invested in these stocks was $22 million. That figure was $63 million in WTRH's case. The First of Long Island Corporation (NASDAQ:FLIC) is the most popular stock in this table. On the other hand iBio, Inc. (NYSE:IBIO) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Waitr Holdings Inc. (NASDAQ:WTRH) is more popular among hedge funds. Our overall hedge fund sentiment score for WTRH is 68.7. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 32.9% in 2020 through December 8th but still managed to beat the market by 16.2 percentage points. Hedge funds were also right about betting on WTRH as the stock returned 22.4% since the end of September (through 12/8) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
