At Insider Monkey, we pore over the filings of nearly 867 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30th. In this article, we will use that wealth of knowledge to determine whether or not Clearwater Analytics Holdings Inc. (NYSE:CWAN) makes for a good investment right now.
Is Clearwater Analytics Holdings Inc. (NYSE:CWAN) a safe stock to buy now? The best stock pickers were turning bullish. The number of bullish hedge fund positions went up by 25 recently. Clearwater Analytics Holdings Inc. (NYSE:CWAN) was in 25 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that CWAN 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. Now we’re going to take a peek at the key hedge fund action encompassing Clearwater Analytics Holdings Inc. (NYSE:CWAN).
Alex Sacerdote of Whale Rock Capital Management
Do Hedge Funds Think CWAN Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25 from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CWAN over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Clearwater Analytics Holdings Inc. (NYSE:CWAN) was held by Whale Rock Capital Management, which reported holding $16.6 million worth of stock at the end of September. It was followed by Foxhaven Asset Management with a $16.6 million position. Other investors bullish on the company included Adage Capital Management, Citadel Investment Group, and Alyeska Investment Group. In terms of the portfolio weights assigned to each position Pinz Capital allocated the biggest weight to Clearwater Analytics Holdings Inc. (NYSE:CWAN) , around 1.15% of its 13F portfolio. Foxhaven Asset Management is also relatively very bullish on the stock, setting aside 0.48 percent of its 13F equity portfolio to CWAN.
As aggregate interest increased, key hedge funds have jumped into Clearwater Analytics Holdings Inc. (NYSE:CWAN) headfirst. Whale Rock Capital Management, managed by Alex Sacerdote, initiated the most valuable position in Clearwater Analytics Holdings Inc. (NYSE:CWAN) . Whale Rock Capital Management had $16.6 million invested in the company at the end of the quarter. Michael Pausic’s Foxhaven Asset Management also made a $16.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Phill Gross and Robert Atchinson’s Adage Capital Management, Ken Griffin’s Citadel Investment Group, and Anand Parekh’s Alyeska Investment Group.
Let’s go over hedge fund activity in other stocks similar to Clearwater Analytics Holdings Inc. (NYSE:CWAN) . We will take a look at TTEC Holdings, Inc. (NASDAQ:TTEC), Equitrans Midstream Corporation (NYSE:ETRN), SeaWorld Entertainment Inc (NYSE:SEAS), Envestnet Inc (NYSE:ENV), Option Care Health, Inc. (NASDAQ:OPCH), Tegna Inc (NYSE:TGNA), and Coursera, Inc. (NYSE:COUR). This group of stocks’ market values resemble CWAN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TTEC | 18 | 46842 | 6 |
| ETRN | 25 | 257789 | -2 |
| SEAS | 38 | 2208655 | -3 |
| ENV | 12 | 357107 | -5 |
| OPCH | 30 | 361789 | -1 |
| TGNA | 37 | 420370 | 19 |
| COUR | 25 | 173727 | 14 |
| Average | 26.4 | 546611 | 4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.4 hedge funds with bullish positions and the average amount invested in these stocks was $547 million. That figure was $87 million in CWAN’s case. SeaWorld Entertainment Inc (NYSE:SEAS) is the most popular stock in this table. On the other hand Envestnet Inc (NYSE:ENV) is the least popular one with only 12 bullish hedge fund positions. Clearwater Analytics Holdings Inc. (NYSE:CWAN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CWAN is 50. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately CWAN wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CWAN investors were disappointed as the stock returned -15.5% since the end of September (through 12/9) 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 in 2021.
Follow Clearwater Analytics Holdings Inc.
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Disclosure: None. This article was originally published at Insider Monkey.
