“Value has performed relatively poorly since the 2017 shift, but we believe challenges to the S&P 500’s dominance are mounting and resulting active opportunities away from the index are growing. At some point, this fault line will break, likely on the back of rising rates, and all investors will be reminded that the best time to diversify away from the winners is when it is most painful. The bargain of capturing long-term value may be short-term pain, but enough is eventually enough and it comes time to harvest the benefits.,” said Clearbridge Investments in its market commentary. We aren’t sure whether long-term interest rates will top 5% and value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. That’s why we believe it would be worthwhile to take a look at the hedge fund sentiment on Alteryx, Inc. (NYSE:AYX) in order to identify whether reputable and successful top money managers continue to believe in its potential.
Alteryx, Inc. (NYSE:AYX) has seen an increase in enthusiasm from smart money lately. AYX was in 26 hedge funds’ portfolios at the end of September. There were 18 hedge funds in our database with AYX holdings at the end of the previous quarter. Our calculations also showed that ayx isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a peek at the latest hedge fund action regarding Alteryx, Inc. (NYSE:AYX).
How are hedge funds trading Alteryx, Inc. (NYSE:AYX)?
At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 44% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards AYX over the last 13 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Alteryx, Inc. (NYSE:AYX) was held by Abdiel Capital Advisors, which reported holding $288.5 million worth of stock at the end of September. It was followed by Whale Rock Capital Management with a $85.1 million position. Other investors bullish on the company included Jericho Capital Asset Management, Renaissance Technologies, and Polar Capital.
As one would reasonably expect, key hedge funds were breaking ground themselves. Whale Rock Capital Management, managed by Alex Sacerdote, created the most valuable position in Alteryx, Inc. (NYSE:AYX). Whale Rock Capital Management had $85.1 million invested in the company at the end of the quarter. Josh Resnick’s Jericho Capital Asset Management also made a $70.3 million investment in the stock during the quarter. The following funds were also among the new AYX investors: Guy Shahar’s DSAM Partners, Paul Tudor Jones’s Tudor Investment Corp, and David Costen Haley’s HBK Investments.
Let’s now take a look at hedge fund activity in other stocks similar to Alteryx, Inc. (NYSE:AYX). These stocks are RLI Corp. (NYSE:RLI), Sprouts Farmers Market Inc (NASDAQ:SFM), American National Insurance Company (NASDAQ:ANAT), and PS Business Parks Inc (NYSE:PSB). This group of stocks’ market caps match AYX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RLI | 11 | 163038 | 1 |
| SFM | 19 | 298608 | 3 |
| ANAT | 13 | 40807 | 1 |
| PSB | 6 | 60694 | -2 |
| Average | 12.25 | 140787 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $141 million. That figure was $682 million in AYX’s case. Sprouts Farmers Market Inc (NASDAQ:SFM) is the most popular stock in this table. On the other hand PS Business Parks Inc (NYSE:PSB) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Alteryx, Inc. (NYSE:AYX) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
