Were Hedge Funds Correct About Spotify?
Spotify is not among the popular holdings in recent times. However, by the end of December, at least 48 hedge funds were found to have a spot in their portfolio. It would seem as though more users have turned their thoughts to Spotify because the platform became the most popular streaming platform. Almost every artist aimed has an active and popular profile on Spotify. When this is compared to the all-time high figure of 67, we can say this is not a bad performance.
Knowing the performance of a stock can be tricky. It is also very аimportant to ensure that one picks the right stock. This would ensure a healthy range of profit. There are different methods used by experts to check the performance of any given stock. Research has revealed that a portfolio holder who follows the trends of the highly-rated fund managers would perform better than average.
One other way is following the yahoo finance monthly newsletter which contains suggested stocks to hold in your portfolio. For a period of 48 months, the stock gave a return of 197%. It also performed better than the S&P 500 by index by a margin of 124%.
Is it Wise to Buy Spotify Now?
If you are that one who follows the trends of the top funds' managers, then it would be interesting to note that as at the end of the 4th quarter of 2020, 48 hedge funds were holding long in the stock.
Companies have gradually increased their holdings for the Spotify. Companies that previously did not have any holdings are also buying in.
Anyone that studies the flow of smart money would notice that a particular group of relevant hedge fund managers invested more of their funds in Spot.
Companies that Invested In Spotify
The largest shareholder of the Spotify technology Tiger Global LLC has a stake of $1001.9 million at the end of the year. The closest highest stakeholder after Tiger Global LLC is the ARK Investment Management with a total stake of $7432.4 million. Some other companies are also high holders of the SPOT. They include GLG Partners, Tremblant Capital, and Polar Capital.
Spotify is not a popular option among hedge funds that hold long-based sentiment scores. The overall sentiment score for Spotify was given at 62.7. This might seem high at first glance, but this is low when compared to the sentiment score of other scores.
Companies like Greenlea Lane Capital and Highside Global Management also invested a larger portion of their portfolio to Spot. Some of the new companies that hopped on the Spot train are new names like CaaS Capital, Mark Asset Management, and Lee Capital Management.
Stocks get higher sentiment scores based on their hedge funds position in relation to other stocks, and also based on their range in previous years in the last 4 months, the performance of the SPOT has been less than impressive. SPOT was not in the top 10 as it had a negative return of -19.9% and still performed below market expectations.
In conclusion, the answer to the point, “Where Hedge funds right about Spotify” is no. They were wrong because Spot performed less than was expected.