Hot IPO trade: Hedge funds love FitBit, hate Etsy

Published Tue, Aug 18 20152:57 PM EDT

Investors are wondering what has happened to once red-hot IPOs like Shake Shack and El Pollo Loco , which have gotten killed over the last three months even as the rest of the market holds up. The Renaissance Capital IPO ETF , tracking shares that came to market the last two years, is off nearly 6 percent in three months and is up just 1 percent on the year now. Alibaba is leading the way, off 28 percent in 2015. But hedge funds still have their favorite IPO shares, which they are scooping up amid the slaughter. Here's what the smart money is buying and selling... Symmetric.io combed through its database of more than 1,000 hedge funds and found that Fitbit is the most-favored brand new stock among hedge funds, according to the latest filings released at the end of last week. More than 30 funds own shares of the exercise wearable maker. Internet domain seller GoDaddy is also loved by the hedge fund crowd. Fitbit has doubled from its IPO price, while GoDaddy is up 35 percent from its debut level. Read More Bearish for 5 years, Citi says buy energy stocks But Etsy gets little love with only 10 funds sticking with the seller of homemade goods three months after its initial offering. That might not bode well for the stock, which is currently trading below its IPO price. Among stocks that have had initial offerings in the last year or so, Alibaba is the favorite still among hedge funds, according to Symmetric. But that's a little misleading as funds have been dumping the shares. The number of Alibaba shares owned by hedge funds decreased by 17 percent. And 113 funds held the stock at the end of the first quarter, compared with 103 today, according to Symmetric. The stock that many funds own and have been adding is LendingClub . The number of LendingClub shares owned by hedge funds increased by 5 percent, according to Symmetric. In addition, five more managers bought in last quarter, bringing the total funds in the stock to 32. Hedge funds also continued to load into Shake Shack even as shares of the popular burger chain collapsed by 20 percent over the last three months. Sixteen funds now find value in SHAK, up from nine at the end of the first quarter, according to Symmetric.

A Fitbit Zip wireless activity tracker at the Wearable Expo in Tokyo, last January.

Kiyoshi Ota | Bloomberg | Getty Images

Investors are wondering what has happened to once red-hot IPOs like Shake Shack and El Pollo Loco, which have gotten killed over the last three months even as the rest of the market holds up.

The Renaissance Capital IPO ETF, tracking shares that came to market the last two years, is off nearly 6 percent in three months and is up just 1 percent on the year now. Alibaba is leading the way, off 28 percent in 2015.

But hedge funds still have their favorite IPO shares, which they are scooping up amid the slaughter. Here's what the smart money is buying and selling...