Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Elastic N.V. (NYSE:ESTC).
Elastic N.V. (NYSE:ESTC) was in 52 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 49. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. ESTC investors should be aware of an increase in activity from the world’s largest hedge funds of late. There were 49 hedge funds in our database with ESTC positions at the end of the fourth quarter. Our calculations also showed that ESTC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
If you’d ask most shareholders, hedge funds are assumed to be underperforming, old financial tools of the past. While there are more than 8000 funds in operation at the moment, Our experts choose to focus on the elite of this group, about 850 funds. It is estimated that this group of investors direct the lion’s share of the smart money’s total capital, and by tailing their inimitable picks, Insider Monkey has spotted various investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
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Do Hedge Funds Think ESTC Is A Good Stock To Buy Now?
At Q1’s end, a total of 52 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ESTC over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Elastic N.V. (NYSE:ESTC) was held by Sylebra Capital Management, which reported holding $561.4 million worth of stock at the end of December. It was followed by Tiger Global Management LLC with a $447 million position. Other investors bullish on the company included Marcho Partners, XN Exponent Advisors, and Broad Bay Capital. In terms of the portfolio weights assigned to each position Sylebra Capital Management allocated the biggest weight to Elastic N.V. (NYSE:ESTC), around 14.51% of its 13F portfolio. Marcho Partners is also relatively very bullish on the stock, designating 10.32 percent of its 13F equity portfolio to ESTC.
With a general bullishness amongst the heavyweights, some big names have jumped into Elastic N.V. (NYSE:ESTC) headfirst. Islet Management, managed by Joseph Samuels, assembled the largest position in Elastic N.V. (NYSE:ESTC). Islet Management had $16.7 million invested in the company at the end of the quarter. Sahm Adrangi’s Kerrisdale Capital also initiated a $15.5 million position during the quarter. The following funds were also among the new ESTC investors: Raffi Tokatlian’s Ararat Capital, Matthew Hulsizer’s PEAK6 Capital Management, and Wen Han Li’s Andar Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Elastic N.V. (NYSE:ESTC). These stocks are Everest Re Group Ltd (NYSE:RE), Formula One Group (NASDAQ:FWONK), PRA Health Sciences Inc (NASDAQ:PRAH), Gaming and Leisure Properties Inc (NASDAQ:GLPI), Henry Schein, Inc. (NASDAQ:HSIC), Penumbra Inc (NYSE:PEN), and American Financial Group (NYSE:AFG). This group of stocks’ market values match ESTC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RE | 32 | 520803 | 3 |
| FWONK | 37 | 1672098 | -5 |
| PRAH | 35 | 1066188 | 12 |
| GLPI | 28 | 594880 | -5 |
| HSIC | 32 | 1262137 | -1 |
| PEN | 27 | 399617 | 7 |
| AFG | 21 | 191538 | -3 |
| Average | 30.3 | 815323 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.3 hedge funds with bullish positions and the average amount invested in these stocks was $815 million. That figure was $1884 million in ESTC’s case. Formula One Group (NASDAQ:FWONK) is the most popular stock in this table. On the other hand American Financial Group (NYSE:AFG) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Elastic N.V. (NYSE:ESTC) is more popular among hedge funds. Our overall hedge fund sentiment score for ESTC is 88. 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 returned 17.2% in 2021 through June 11th but still managed to beat the market by 3.3 percentage points. Hedge funds were also right about betting on ESTC as the stock returned 22.9% since the end of March (through 6/11) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
