Is eBay Inc (NASDAQ:EBAY) a good stock to buy right now? We are going to answer this question by looking at hedge fund interest in the stock. EBAY was in 90 hedge funds’ portfolio at the end of the third quarter of 2014. The stock has also seen an increase in hedge fund sentiment of late. There were 88 hedge funds with EBAY positions at the end of June, according to hedge fund tracking website Insider Monkey.
To most shareholders, hedge funds are perceived as unimportant, old investment vehicles of the past. While there are greater than 8000 funds with their doors open at present, hedge fund experts at Insider Monkey choose to focus on the crème de la crème of this group, about 700 funds. These money managers preside over the majority of all hedge funds’ total capital, and by monitoring their inimitable stock picks, Insider Monkey has deciphered several investment strategies that have historically defeated the broader indices. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 18 percentage points a year for a decade in their back tests. Their research has also shown that the 30 most popular stocks among hedge funds outperform the market by a couple of percentage points per year. EBAY is one of those stocks. So, quantitatively, EBAY seems to be a good stock to buy right now.
Keeping this in mind, let’s take a look at the new action surrounding eBay Inc (NASDAQ:EBAY).
Hedge fund activity in eBay Inc (NASDAQ:EBAY)
At Q3’s end, a total of 90 of the hedge funds tracked by Insider Monkey were bullish in this stock, a change of 2% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings substantially.
According to hedge fund intelligence website Insider Monkey, Carl Icahn’s Icahn Capital had the largest position in eBay Inc (NASDAQ:EBAY), worth close to $2.5951 billion, accounting for 7.7% of its total 13F portfolio. The second largest stake is held by William B. Gray of Orbis Investment Management, with a $930.9 million position; 7.4% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Donald Yacktman’s Yacktman Asset Management, Barry Rosenstein’s JANA Partners and D. E. Shaw’s D E Shaw.
As one would reasonably expect, specific money managers have been driving this bullishness. JANA Partners, managed by Barry Rosenstein, created the biggest call position in eBay Inc (NASDAQ:EBAY). JANA Partners had 299.8 million invested in the company at the end of the quarter. Dan Loeb’s Third Point also made a $254.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Jeffrey Altman’s Owl Creek Asset Management, John Osterweis’s Osterweis Capital Management, and Craig C. Albert’s Sheffield Asset Management.