After a few tireless days, we have released the numbers of nearly 900 13F documents issued by the elite hedge funds and other investment firms that we follow at Insider Monkey, which will appear on the firms ’equity portfolios on December 31st. The results of this effort will be displayed in this article as we have valuable insight into the smart money sentiment towards Tesla Inc. (NASDAQ: TSLA).
Is TSLA share a buy or sell? Tesla Inc. (NASDAQ: TSLA) was at the end of the fourth quarter of 2020 in 68 portfolios of hedge funds. The highest point for this statistic was previously 67. This means that the bullish number of hedge fund positions in this stock is currently sitting at its highest point. TSLA investors should note recently an increase in hedge fund interest. There were 67 hedge funds in our database of TSLA positions at the end of the third quarter. Our calculations have also shown that TSLA is not one of the 30 most popular stocks among hedge funds (click for Q4 rankings).
In the financial world, there are a large number of instruments that investors have at their disposal to rate stocks. Some of the instruments that are most under the radar are hedge fund and insider trading indicators. We have shown that those who follow the best choices of the best fund managers can historically outperform the broader indices. Insider Monkey’s monthly shares have returned 197% since March 2017, surpassing the S&P 500 ETFs by more than 124 percentage points. Our short strategy surpassed the S&P 500 short ETFs by 20 percentage points annually (see details here). Therefore, we believe that the hedge fund is a useful indicator that investors should pay attention to.
Philippe Laffont of Coatue Management
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Do Hedge Funds think TSLA is a good stock to buy right now?
In the first quarter of 2021, a total of 68 of the hedge funds tracked by Insider Monkey were long this share, a change of 1% from a quarter earlier. Below you can see the change in hedge fund sentiment towards TSLA over the past 22 quarters. With capital changes of hedges, there are some important hedge fund managers who have significantly increased their holdings (or have already built up large positions).
More specifically, ARK Investment Management was the largest shareholder in Tesla Inc. (NASDAQ: TSLA), with a stake worth $ 2917.4 million at the end of December. The back ARK Investment Management was LMR Partners, which raised a stake of $ 2056 million. Coatue Management, Whale Rock Capital Management and LMR Partners also loved the stock and are becoming one of the company’s largest hedge fund owners. In terms of the portfolio weights assigned to each position, LMR Partners has the largest weight given to Tesla Inc. (NASDAQ: TSLA), about 31.95% of its 13F portfolio. Tao Capital is also relatively very strong on the stock, handing out 22.56 percent of its 13F equity portfolio to TSLA.
With a general strength among the heavyweights, some big names led the herd of the bulls. Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the largest position in Tesla Inc. (NASDAQ: TSLA) compiled. Adage Capital Management invested $ 465.4 million in the company at the end of the quarter. David Costen Haley’s HBK Investments also made a $ 228.3 million investment in the stock during the quarter. The other funds with new positions in the shares are Daniel Gold’s QVT Financial, Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (formerly Springbok Capital) and Charles Clough’s Clough Capital Partners.
Let’s look at hedge fund activities in other stocks similar to Tesla Inc. (NASDAQ: TSLA). These shares are Alibaba Group Holding Limited (NYSE: BABA), Taiwan Semiconductor Mfg. Co. Ltd. (NYSE: TSM), Berkshire Hathaway Inc. (NYSE: BRK-B), Visa Inc (NYSE: V), Johnson & Johnson (NYSE: JNJ), Walmart Inc. (NYSE: WMT), and JPMorgan Chase & Co. (NYSE: JPM). This group of stock markets looks like TSLA’s market capitalization.
[table] Ticker, number of HFs with positions, total value of HF positions (x1000), change in HF position BABA, 156,17892090, -10 TSM, 72,11843403,5 BRK-B, 110,20795968,1 V, 166, 23599162, 6 JNJ, 81.5820696, -1 WMT, 70.6197019.1 JPM, 112.6967178, -6 Average, 109.6.13222217, -0.6 [/table]
Check out the table here if you are experiencing formatting issues.
As you can see, these stocks had an average of 109.6 positive-position hedge funds and the average amount invested in these stocks was $ 13,302 million. The amount in the case of TSLA was $ 12308 million. Visa Inc (NYSE: V) is the most popular stock in this table. On the other hand, Walmart Inc. (NYSE: WMT) the least popular with only 70 bullish hedge fund positions. Compared to these shares, Tesla Inc. is (NASDAQ: TSLA) even less popular than WMT. Our overall hedge fund sentiment score for TSLA is 36. Shares with a higher number of hedge fund positions relative to other stocks, as well as their historical range, get a higher sentiment score. Hedge funds evaded a bullet by taking a clumsy stance towards TSLA. Our calculations showed that the top 20 most popular hedge fund shares returned 81.2% in 2019 and 2020 and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks rose 7% in 2021 to March 12, but managed to beat the market again by 1.6 percentage points. Unfortunately, TSLA was not nearly as popular as these 30 stocks (hedge fund sentiment was very bearish); TSLA investors were disappointed because the stock had underperformed the market and the market under-performing returns since the end of the fourth quarter (up to 3/12). If you are interested in investing in large-cap stocks with great upside potential, you should visit the top 30 most popular stocks among hedge funds as most of these stocks have outperformed the market since 2019.
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Disclosure: None. This article was originally published by Insider Monkey.
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