Hedge funds made some pretty interesting bets in the first quarter of this year, and a lot of them, I believe, have mostly flown under the radar of investors. And while some of the smart-money bets may not have been the biggest needle-movers in the world, I do think that such big-name stock pick-ups may act as breadcrumbs for where the value may be in this turbulent climate.
Of course, we’ll have to wait for the next round of 13F filings to see if buyers moved even more funds into the names they added to or initiated in the first quarter. After all, some hedge funds tend to do their big buying incrementally over a number of quarters. In any case, let’s have a look at three big money bets that I find notable and perhaps indicative of decent value to be had in a market that some pundits would describe as mildly expensive.
Uber Technologies
First up, we have ride-hailing company Uber Technologies (NASDAQ:UBER | UBER Price Prediction), which has taken investors on a 103% gain in the past two years. Despite the euphoric drive higher, shares still don’t look anything close to expensive. They look dirt-cheap, with shares currently trading at 14.7 times trailing price-to-earnings (P/E).
Given the robust performance and the still-depressed valuation (perhaps unfairly depressed), it should be no surprise to learn that a few big-name money managers scooped up the stock in the first quarter of the year. Most notable among the names, Pershing Square Holdings’ Bill Ackman, initiated a considerable position in the name in Q1, while a handful of other hedge fund legends (think Dave Tepper, Thomas Russo, and Thomas Gayner) also reportedly added to their existing positions.
Given the hedge fund buying activity, which is becoming hard to ignore, I’d be inclined to give the name a second look as it corrects off recent all-time highs. Indeed, much of the discounted valuation is due to uncertainties regarding the firm’s fate once robotaxis become mainstream.
As the company tests self-driving vehicles in the streets of London, perhaps it’s unfair to dub Uber as a firm that’ll lose share. If anything, Uber appears poised to become a massive winner in robotaxis as its autonomous-driving partnerships yield results.
Estee Lauder
Estee Lauder (NYSE:EL) is the only stock that’s worthy of Dr. Michael Burry’s portfolio these days. As a true contrarian who’s not afraid to make bold bets, the big stake in the fallen beauty company, I believe, is incredibly remarkable. Indeed, Burry, who bet against the housing market ahead of the Great Financial Crisis, has been quite the active seller of late. So, any new buys, I think, must be perceived as deep with value.
After shedding more than 80% of its value from its 2021 high, the name may have finally overswung to the downside. Sure, catching falling knives is difficult, but if you’re getting a legendary brand at just 1.7 times price-to-book (P/B), I’d say it’s tough not to want to jump in and buy a few shares. With Burry aboard, I’m inclined to view EL stock as a great pick-up for those who aren’t strangers to volatility.
YETI Holdings
YETI Holdings (NYSE:YETI) is a $2.5 billion upscale outdoor products company that’s perhaps best known for its sturdy tumblers and coolers. Apart from doing a great job of keeping drinks cool or hot, Yeti gear is also very aesthetically pleasing, with a wide range of colors that pop.
As young influencers continue embracing the product, I think Yeti is an under-the-radar mid-cap to keep close watch of. The company has managed to combine style with performance, and as it takes on new markets with a growing lineup of goods, the growth ceiling certainly seems high.
Three notable hedge funds scooped up shares of the fallen drinkware juggernaut. Today, shares have shed over 70% from their peak and go for just 14.4 times trailing P/E. That’s incredibly cheap for a firm that can stand tall in the face of tariffs.
Top Gaining Stocks
Top Losing Stocks