Is Match Group, Inc. (NASDAQ:MTCH) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Match Group, Inc. (NASDAQ:MTCH) a marvelous stock to buy now? The smart money was taking a pessimistic view. The number of long hedge fund bets decreased by 4 in recent months. Match Group, Inc. (NASDAQ:MTCH) was in 68 hedge funds' portfolios at the end of March. The all time high for this statistic is 72. Our calculations also showed that MTCH 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.
Ole Andreas Halvorsen of Viking Global
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, advertising technology one of the fastest growing industries right now, so we are checking out stock pitches like this under-the-radar adtech stock that can deliver 10x gains. We go through lists like the 10 best hydrogen fuel cell 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 view the recent hedge fund action regarding Match Group, Inc. (NASDAQ:MTCH).
Do Hedge Funds Think MTCH Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 68 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the previous quarter. The graph below displays the number of hedge funds with bullish position in MTCH over the last 23 quarters. With hedgies' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Lone Pine Capital, holds the largest position in Match Group, Inc. (NASDAQ:MTCH). Lone Pine Capital has a $852.4 million position in the stock, comprising 3.1% of its 13F portfolio. The second largest stake is held by Andreas Halvorsen of Viking Global, with a $279.5 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish include John Armitage's Egerton Capital Limited, Ken Griffin's Citadel Investment Group and Robert Pitts's Steadfast Capital Management. In terms of the portfolio weights assigned to each position ShawSpring Partners allocated the biggest weight to Match Group, Inc. (NASDAQ:MTCH), around 11.22% of its 13F portfolio. Six Columns Capital is also relatively very bullish on the stock, designating 5.87 percent of its 13F equity portfolio to MTCH.
Because Match Group, Inc. (NASDAQ:MTCH) has witnessed a decline in interest from hedge fund managers, it's easy to see that there exists a select few hedge funds who sold off their full holdings last quarter. Interestingly, Alex Sacerdote's Whale Rock Capital Management cut the largest investment of all the hedgies followed by Insider Monkey, totaling about $370.7 million in stock, and Gabriel Plotkin's Melvin Capital Management was right behind this move, as the fund said goodbye to about $170.8 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 4 funds last quarter.
Let's now take a look at hedge fund activity in other stocks similar to Match Group, Inc. (NASDAQ:MTCH). We will take a look at Southwest Airlines Co. (NYSE:LUV), Prudential Financial Inc (NYSE:PRU), Roblox Corporation (NYSE:RBLX), Cintas Corporation (NASDAQ:CTAS), Xcel Energy Inc (NASDAQ:XEL), Lufax Holding Ltd (NYSE:LU), and Phillips 66 (NYSE:PSX). This group of stocks' market caps match MTCH's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LUV,52,747041,-3 PRU,37,634521,1 RBLX,46,3387779,46 CTAS,32,582628,-4 XEL,18,200349,-10 LU,9,208197,-2 PSX,24,290593,-2 Average,31.1,864444,3.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.1 hedge funds with bullish positions and the average amount invested in these stocks was $864 million. That figure was $2938 million in MTCH's case. Southwest Airlines Co. (NYSE:LUV) is the most popular stock in this table. On the other hand Lufax Holding Ltd (NYSE:LU) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Match Group, Inc. (NASDAQ:MTCH) is more popular among hedge funds. Our overall hedge fund sentiment score for MTCH is 79.3. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Unfortunately MTCH wasn't nearly as popular as these 5 stocks and hedge funds that were betting on MTCH were disappointed as the stock returned 3% since the end of the first quarter (through 6/11) 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 since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.