Hedge funds are on the rise
At Insider Monkey, we have reviewed 873 13F files that hedge funds and leading investors are required to file by the SEC. The 13F documents show the portfolio positions of funds and investors as of June 30. In this article, we take a look at what these funds think of Take-Two Interactive Software, Inc. (NASDAQ:OF THEM) on the basis of this data.
East Take-Two Interactive Software, Inc. (NASDAQ:OF THEM) will take off soon? Fund managers were becoming more confident. The number of bullish bets on hedge funds has increased by 14 in recent times. Take-Two Interactive Software, Inc. (NASDAQ:OF THEM) was in 55 hedge fund portfolios at the end of the second quarter of 2021. The all-time high for this statistic is 66. Our calculations have also shown that TTWO is not among the 30 most popular stocks among hedge funds (click for Q2 ranking). There were 41 hedge funds in our database with TTWO positions at the end of the first quarter.
So why do we pay attention to hedge fund sentiment before making investment decisions? Our research has shown that small-cap hedge fund stock selection managed to beat the market by double digits every year between 1999 and 2016, but the margin for outperformance has shrunk in recent years. Nonetheless, we were still able to identify in advance a select group of hedge funds that have outperformed S&P 500 ETFs by more than 79 percentage points since March 2017 (see details here). We have been able to outperform passive index funds by tracking corporate and hedge fund insider movements, and we believe small investors can benefit greatly from reading hedge fund investor letters and records. 13F.
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey, we scour multiple sources to uncover the next big investing idea. For example, lithium mining is one of the fastest growing industries right now, so we’re looking at stock locations like this. emerging lithium stocks. We go through lists like the 10 best EV stocks to choose the next Tesla that will offer 10x yield. Even though we only recommend positions in a tiny fraction of the companies we analyze, we check as many stocks as possible. We read letters from hedge fund investors and listen to equity pitches at hedge fund conferences. You can subscribe to our free daily newsletter at our home page. With all of that in mind, let’s take a look at the new hedge fund action regarding Take-Two Interactive Software, Inc. (NASDAQ:OF THEM).
Do hedge funds think TTWO is a good stock to buy now?
As we approach the third quarter of 2021, a total of 55 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 34% from the first quarter of 2020. Below, you can check out the evolution of the hedge fund sentiment towards TTWO over the last 24 quarters. With hedge fund positions undergoing their usual ebb and flow, there is a “top tier” of notable hedge fund managers who were significantly increasing their stakes (or already accumulating large positions).
Specifically, Holocene Advisors was the largest shareholder in Take-Two Interactive Software, Inc. (NASDAQ: TTWO), with a stake worth $ 124 million reported at the end of June. Trailing Holocene Advisors was Arrowstreet Capital, which raised a stake valued at $ 120.4 million. Citadel Investment Group, Millennium Management and Renaissance Technologies were also very fond of the stock, becoming one of the largest hedge fund holders in the company. In terms of portfolio weights assigned to each position Marlowe Partners assigned the largest weighting to Take-Two Interactive Software, Inc. (NASDAQ: TTWO), approximately 7.98% of its 13F portfolio. Traction capital is also relatively very bullish on the stock, designating 6.72% of its 13F equity portfolio to TTWO.
As one might reasonably expect, there were a few big names leading the herd of bulls. Balyasny Asset Management, managed by Dmitry Balyasny, established the most valuable position in Take-Two Interactive Software, Inc. (NASDAQ: TTWO). Balyasny Asset Management had invested $ 41.3 million in the company at the end of the quarter. Gabriel Plotkin’s Melvin Capital Management also invested $ 35.4 million in the stock during the quarter. The following funds were also among TTWO’s new investors: Jack Woodruff’s Chandelier Capital management, Junto Capital Management by James Parsons and James Crichton Hitchwood Capital Management.
Now let’s review hedge fund activity in other stocks similar to Take-Two Interactive Software, Inc. (NASDAQ: TTWO). These shares are Steris Plc (NYSE:STE), Trimble Inc. (NASDAQ:TRMB), Ingersoll Rand Inc. (NYSE:IR), Ameren Corporation (NYSE:AEE), Fox Corporation (NASDAQ:FOX), ZoomInfo Technologies Inc. (NASDAQ:ZI) and Logitech International SA (NASDAQ:LOGI). The market valuations of this group of stocks resemble the market valuation of TTWO.
[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of position HF STE, 35.1783774.5 TRMB, 27.1799575.4 IR, 31.873484, -4 AEE, 23.212535.4 FOX, 25.590317.0 ZI, 35.670224.11 LOGI, 20.526968.5 Medium, 28.922411.3.6 [/table]
See the table here if you have formatting problems.
As you can see, these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $ 922 million. That figure was $ 1,314 million in the case of TTWO. Steris Plc (NYSE:STE) is the most popular action in this table. On the other hand Logitech International SA (NASDAQ:LOGI) is the least popular with only 20 bullish hedge fund positions. Compared to these stocks, Take-Two Interactive Software, Inc. (NASDAQ: TTWO) is more popular among hedge funds. Our overall hedge fund sentiment score for TTWO is 85. Stocks with a 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 have shown 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 22.9% in 2021 through October 1 and have consistently beaten the market by 5.6 percentage points. Unfortunately, TTWO was not as popular as these 5 stocks and the hedge funds that bet on TTWO were disappointed as the stock returned -10.4% since the end of the second quarter (through 10/1) and underperformed the market. If you want to invest 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 have already outperformed the market since 2019.
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Disclosure: none. This article originally appeared on Monkey initiate.