CrowdStrike Holdings, Inc. (CRWD): Hedge Funds Are Snapping Up

Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed in recent years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that certain hedge funds do have great stock picking skills (and we can identify these hedge funds in advance pretty accurately), so let’s take a glance at the smart money sentiment towards CrowdStrike Holdings, Inc. (NASDAQ:CRWD).

Is CrowdStrike Holdings, Inc. (NASDAQ:CRWD) a healthy stock for your portfolio? Prominent investors were in a bullish mood. The number of bullish hedge fund bets improved by 8 recently. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) was in 74 hedge funds’ portfolios at the end of September. The all time high for this statistic is 92. Our calculations also showed that CRWD isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 66 hedge funds in our database with CRWD positions at the end of the second quarter.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to analyze the latest hedge fund action encompassing CrowdStrike Holdings, Inc. (NASDAQ:CRWD).

Alex Sacerdote of Whale Rock Capital Management

Do Hedge Funds Think CRWD Is A Good Stock To Buy Now?

At Q3’s end, a total of 74 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 12% from the second quarter of 2021. On the other hand, there were a total of 71 hedge funds with a bullish position in CRWD a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Chase Coleman’s Tiger Global Management LLC has the number one position in CrowdStrike Holdings, Inc. (NASDAQ:CRWD), worth close to $1.8524 billion, accounting for 3.6% of its total 13F portfolio. On Tiger Global Management LLC’s heels is Matrix Capital Management, managed by David Goel and Paul Ferri, which holds a $737.3 million position; 8.4% of its 13F portfolio is allocated to the company. Remaining members of the smart money that hold long positions consist of Alex Sacerdote’s Whale Rock Capital Management, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Matrix Capital Management allocated the biggest weight to CrowdStrike Holdings, Inc. (NASDAQ:CRWD), around 8.39% of its 13F portfolio. Jeneq Management is also relatively very bullish on the stock, setting aside 5.06 percent of its 13F equity portfolio to CRWD.

Now, some big names have jumped into CrowdStrike Holdings, Inc. (NASDAQ:CRWD) headfirst. Strategy Capital, managed by Hamilton Helmer, initiated the biggest position in CrowdStrike Holdings, Inc. (NASDAQ:CRWD). Strategy Capital had $49.2 million invested in the company at the end of the quarter. Nancy Zevenbergen’s Zevenbergen Capital Investments also made a $45.3 million investment in the stock during the quarter. The following funds were also among the new CRWD investors: Zach Schreiber’s Point State Capital, Sanjay Venkat’s Jeneq Management, and David Fiszel’s Honeycomb Asset Management.

Let’s check out hedge fund activity in other stocks similar to CrowdStrike Holdings, Inc. (NASDAQ:CRWD). We will take a look at Relx PLC (NYSE:RELX), UBS Group AG (NYSE:UBS), General Dynamics Corporation (NYSE:GD), Thomson Reuters Corporation (NYSE:TRI), Baidu, Inc. (NASDAQ:BIDU), Honda Motor Co Ltd (NYSE:HMC), and DexCom, Inc. (NASDAQ:DXCM). This group of stocks’ market values match CRWD’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.7 hedge funds with bullish positions and the average amount invested in these stocks was $1618 million. That figure was $6742 million in CRWD’s case. DexCom, Inc. (NASDAQ:DXCM) is the most popular stock in this table. On the other hand Relx PLC (NYSE:RELX) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is more popular among hedge funds. Our overall hedge fund sentiment score for CRWD is 84.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately CRWD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CRWD were disappointed as the stock returned -11.7% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.