The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Smartsheet Inc. (NYSE:SMAR) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Is Smartsheet Inc. (NYSE:SMAR) a buy here? Investors who are in the know were turning bullish. The number of long hedge fund bets improved by 1 recently. Smartsheet Inc. (NYSE:SMAR) was in 50 hedge funds’ portfolios at the end of September. The all time high for this statistic is 50. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SMAR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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. With all of this in mind we’re going to analyze the latest hedge fund action surrounding Smartsheet Inc. (NYSE:SMAR).
Julian Robertson of Tiger Management
Do Hedge Funds Think SMAR Is A Good Stock To Buy Now?
At third quarter’s end, a total of 50 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from the second quarter of 2021. By comparison, 45 hedge funds held shares or bullish call options in SMAR a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
More specifically, Alkeon Capital Management was the largest shareholder of Smartsheet Inc. (NYSE:SMAR), with a stake worth $226.7 million reported as of the end of September. Trailing Alkeon Capital Management was Foxhaven Asset Management, which amassed a stake valued at $118.4 million. Citadel Investment Group, Polar Capital, and 12 West Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Calixto Global Investors allocated the biggest weight to Smartsheet Inc. (NYSE:SMAR), around 15.35% of its 13F portfolio. Kayak Investment Partners is also relatively very bullish on the stock, setting aside 7.3 percent of its 13F equity portfolio to SMAR.
As industrywide interest jumped, some big names were leading the bulls’ herd. Cavalry Asset Management, managed by John Hurley, established the most valuable position in Smartsheet Inc. (NYSE:SMAR). Cavalry Asset Management had $29.4 million invested in the company at the end of the quarter. David Thomas’s Atalan Capital also initiated a $20.6 million position during the quarter. The other funds with brand new SMAR positions are David Fiszel’s Honeycomb Asset Management, Julian Robertson’s Tiger Management, and Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital).
Let’s now take a look at hedge fund activity in other stocks similar to Smartsheet Inc. (NYSE:SMAR). We will take a look at Sensata Technologies Holding plc (NYSE:ST), Alleghany Corporation (NYSE:Y), Western Midstream Partners, LP (NYSE:WES), Cameco Corporation (NYSE:CCJ), Vornado Realty Trust (NYSE:VNO), Flex Ltd. (NASDAQ:FLEX), and Ovintiv Inc. (NYSE:OVV). All of these stocks’ market caps match SMAR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ST | 29 | 1546287 | -3 |
| Y | 30 | 325413 | -2 |
| WES | 10 | 141259 | 1 |
| CCJ | 35 | 755744 | 10 |
| VNO | 25 | 194723 | -4 |
| FLEX | 35 | 1149382 | -8 |
| OVV | 44 | 684078 | 4 |
| Average | 29.7 | 685269 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.7 hedge funds with bullish positions and the average amount invested in these stocks was $685 million. That figure was $1378 million in SMAR’s case. Ovintiv Inc. (NYSE:OVV) is the most popular stock in this table. On the other hand Western Midstream Partners, LP (NYSE:WES) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Smartsheet Inc. (NYSE:SMAR) is more popular among hedge funds. Our overall hedge fund sentiment score for SMAR is 86. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, SMAR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SMAR were disappointed as the stock returned -9.6% since the end of the third quarter (through 1/31) 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 all of these stocks already outperformed the market since 2019.
Follow Smartsheet Inc (NYSE:SMAR)
Follow Smartsheet Inc (NYSE:SMAR)
Suggested Articles:
- 10 Best Dividend Stocks on Robinhood
- 10 Most Profitable Industries in the US
- 15 Biggest Private Equity Firms In The World
Disclosure: None. This article was originally published at Insider Monkey.
