PayPal Holdings and streaming giant Netflix attracted the largest number of new hedge fund investors in the third quarter.
At least 54 hedge funds established new positions in PayPal, while just 21 fully exited, for a net gain of 33 hedge fund investors, according to an analysis of the data from SEI Novus, which has compiled perhaps the most comprehensive database of hedge fund holdings. As a result, PayPal had a total of 185 hedge fund investors at the end of September, making it the twelfth-most popular hedge fund stock.
Netflix pulled in 52 new hedge fund investors in the third quarter, while 30 fully liquidated their positions, according to Novus. The company now has 153 total hedge fund investors, good for the No. 24 spot.
UnitedHealth Group, meanwhile, wasn’t among the leaders in the number of new investors, but the managed healthcare and insurance company did enjoy a net gain of 27 hedge fund investors, with 33 new investors coming on board and just six fully exiting. The company now has 183 investors, tied with Johnson & Johnson for 13th place.
PayPal drew very strong interest from some of the biggest Tiger Cub names. At the end of the third quarter, the stock was the third-largest U.S.-listed long for Lone Pine Capital, after the firm founded by Stephen Mandel, Jr. nearly doubled its stake to roughly 8.3 million shares.
Philippe Laffont’s Coatue Management almost quadrupled its stake to about 4.7 million shares in the third quarter, making the stock its sixth-largest U.S. long, while O. Andreas Halvorsen’s Viking Global Investors initiated a stake of about 1.7 million shares, although the stock isn’t a major position for the firm.
Samlyn Capital Management, meanwhile, bought two million shares in the third quarter, making the company the firm’s sixth-largest long, while Senator Investment Group, which doesn’t have roots to Tiger Management, made the stock its fifth-largest long after initiating a stake of 570,000 shares.
Earlier this month, after PayPal reduced its 2022 revenue guidance but raised its earnings per share guidance, Credit Suisse maintained both its outperform rating and its $100 price target on the stock, according to a report obtained by Institutional Investor. The investment bank also noted that PayPal continues to be committed to an aggressive stock buyback program.
PayPal’s stock hasn’t fared particularly well this quarter, dropping about 10 percent since the end of September. UBS recently maintained its buy rating on the company but reduced its price target from $136 to $123.
Netflix, meanwhile, became the largest U.S. long of Jericho Capital Management, after the firm initiated a new, roughly 900,000-share position in the third quarter. Whale Rock Capital Management also initiated a new position in the third quarter that immediately became its third-largest long.
Shares of Netflix are up more than 19 percent since the end of September. Credit Suisse last month lifted its discounted cash flow target price for the stock by $8, to $271.
On the UnitedHealth front, several prominent hedge fund firms initiated positions in the company in the third quarter, including MAN Group, which now counts the stock as its seventh-largest U.S.-listed long. Keep in mind that the firm has a slew of funds across a variety of investment strategies.
Viking also initiated a new position in the third quarter, although the company isn’t a significant part of the firm’s overall portfolio.
Since the end of September, UnitedHealth is up about 4.6 percent, to $528. In late October, UBS lifted its price target from $580 to $590.
Here are the 15 most popular stocks among hedge funds as of September 30, according to SEI Novus:
- Microsoft (396 hedge fund investors)
- Amazon (373)
- Alphabet, Class “A” (295)
- Meta Platforms (263)
- Apple (247)
- Visa (243)
- Alphabet, Class “C” (240)
- Mastercard (219)
- JPMorgan Chase (203)
- Walt Disney (195)
- Berkshire Hathaway (185)
- PayPal Holdings (185)
- Johnson & Johnson (183)
- UnitedHealth (183)
- Salesforce (166)
