Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The last 12 months is one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 10 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller cap stocks, they have seen some volatility in their portfolios too. Actually their moves are potentially one of the factors that contributed to this volatility. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of Everbridge, Inc. (NASDAQ:EVBG).
Everbridge, Inc. (NASDAQ:EVBG) investors should be aware of a decrease in hedge fund sentiment of late. Our calculations also showed that EVBG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most stock holders, hedge funds are assumed to be unimportant, old financial tools of the past. While there are greater than 8000 funds trading today, Our researchers look at the top tier of this group, around 750 funds. These investment experts shepherd the lion’s share of all hedge funds’ total asset base, and by shadowing their unrivaled stock picks, Insider Monkey has deciphered numerous investment strategies that have historically surpassed the market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points annually since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Philippe Laffont of Coatue Management
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a glance at the latest hedge fund action regarding Everbridge, Inc. (NASDAQ:EVBG).
What have hedge funds been doing with Everbridge, Inc. (NASDAQ:EVBG)?
Heading into the fourth quarter of 2019, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards EVBG over the last 17 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Select Equity Group held the most valuable stake in Everbridge, Inc. (NASDAQ:EVBG), which was worth $164.7 million at the end of the third quarter. On the second spot was Sylebra Capital Management which amassed $53 million worth of shares. Valinor Management, Polar Capital, and Alkeon 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 Alta Park Capital allocated the biggest weight to Everbridge, Inc. (NASDAQ:EVBG), around 5.73% of its portfolio. Valinor Management is also relatively very bullish on the stock, dishing out 3.29 percent of its 13F equity portfolio to EVBG.
Since Everbridge, Inc. (NASDAQ:EVBG) has experienced a decline in interest from the smart money, we can see that there is a sect of hedge funds that decided to sell off their entire stakes last quarter. Interestingly, Glen Kacher’s Light Street Capital dumped the biggest stake of all the hedgies followed by Insider Monkey, worth close to $45 million in stock, and Adam Parker’s Center Lake Capital was right behind this move, as the fund dumped about $29.5 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 1 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Everbridge, Inc. (NASDAQ:EVBG) but similarly valued. These stocks are SeaWorld Entertainment Inc (NYSE:SEAS), Alliance Resource Partners, L.P. (NASDAQ:ARLP), CoreCivic, Inc. (NYSE:CXW), and 8×8, Inc. (NYSE:EGHT). All of these stocks’ market caps match EVBG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SEAS | 32 | 998661 | 0 |
| ARLP | 7 | 89565 | -2 |
| CXW | 17 | 173840 | 3 |
| EGHT | 22 | 452982 | 2 |
| Average | 19.5 | 428762 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.5 hedge funds with bullish positions and the average amount invested in these stocks was $429 million. That figure was $409 million in EVBG’s case. SeaWorld Entertainment Inc (NYSE:SEAS) is the most popular stock in this table. On the other hand Alliance Resource Partners, L.P. (NASDAQ:ARLP) is the least popular one with only 7 bullish hedge fund positions. Everbridge, Inc. (NASDAQ:EVBG) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on EVBG as the stock returned 42.5% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
