While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Fisker Inc. (NYSE:FSR).
Is FSR a good stock to buy now? Investors who are in the know were in a bullish mood. The number of long hedge fund bets advanced by 4 in recent months. Fisker Inc. (NYSE:FSR) was in 22 hedge funds’ portfolios at the end of March. The all time high for this statistic is 18. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that FSR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 18 hedge funds in our database with FSR holdings at the end of December.
In the 21st century investor’s toolkit there are dozens of methods stock market investors use to grade stocks. A couple of the most useful methods are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the elite fund managers can outclass their index-focused peers by a healthy margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Stanley Druckenmiller of Duquesne Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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 glance at the fresh hedge fund action regarding Fisker Inc. (NYSE:FSR).
Do Hedge Funds Think FSR Is A Good Stock To Buy Now?
At Q1’s end, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in FSR over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Moore Global Investments held the most valuable stake in Fisker Inc. (NYSE:FSR), which was worth $169.5 million at the end of the fourth quarter. On the second spot was Renaissance Technologies which amassed $48.8 million worth of shares. D E Shaw, Balyasny Asset Management, and Duquesne 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 Moore Global Investments allocated the biggest weight to Fisker Inc. (NYSE:FSR), around 2.15% of its 13F portfolio. Prentice Capital Management is also relatively very bullish on the stock, designating 1.07 percent of its 13F equity portfolio to FSR.
Now, key money managers were breaking ground themselves. Renaissance Technologies, established the largest position in Fisker Inc. (NYSE:FSR). Renaissance Technologies had $48.8 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $41.8 million investment in the stock during the quarter. The following funds were also among the new FSR investors: Stanley Druckenmiller’s Duquesne Capital, Zach Schreiber’s Point State Capital, and Ari Zweiman’s 683 Capital Partners.
Let’s check out hedge fund activity in other stocks similar to Fisker Inc. (NYSE:FSR). We will take a look at Sinopec Shanghai Petrochemical Company Limited (NYSE:SHI), Marathon Digital Holdings, Inc. (NASDAQ:MARA), BlackBerry Limited (NYSE:BB), Synaptics Incorporated (NASDAQ:SYNA), Shake Shack Inc (NYSE:SHAK), Neogen Corporation (NASDAQ:NEOG), and Valvoline Inc. (NYSE:VVV). All of these stocks’ market caps match FSR’s market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SHI,4,14885,-1 MARA,10,197814,2 BB,24,499771,-7 SYNA,25,533817,-3 SHAK,23,560136,-2 NEOG,10,29017,-6 VVV,23,677540,-4 Average,17,358997,-3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $359 million. That figure was $338 million in FSR’s case. Synaptics Incorporated (NASDAQ:SYNA) is the most popular stock in this table. On the other hand Sinopec Shanghai Petrochemical Company Limited (NYSE:SHI) is the least popular one with only 4 bullish hedge fund positions. Fisker Inc. (NYSE:FSR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FSR is 81.9. 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 positive signal but 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 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately FSR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FSR were disappointed as the stock returned -11% since the end of March (through 7/16) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.