After a lengthy stretch of outperformance, small-cap stocks suffered from July 2015 through June 2016, as heightened global economic fears led investors to flee to the safe havens of large-cap stocks and other instruments. Those stocks outperformed small-caps by about 10 percentage points during that time, with small-cap healthcare stocks being particularly hard hit. However, the tide has since turned in a big way, as evidenced by small-caps toppling their large-cap peers by 5 percentage points in the third quarter, and by another 5 percentage points in the first seven weeks of the fourth quarter. In this article, we’ll analyze how this shift affected hedge funds’ Q3 trading of Akamai Technologies, Inc. (NASDAQ:AKAM) and see how the stock is affected by the recent hedge fund activity.
Akamai Technologies, Inc. (NASDAQ:AKAM) investors should be aware of an increase in enthusiasm from smart money lately. At the end of this article we will also compare AKAM to other stocks including WestRock Co (NYSE:WRK), Mettler-Toledo International Inc. (NYSE:MTD), and Total System Services, Inc. (NYSE:TSS) to get a better sense of its popularity.
Follow Akamai Technologies Inc (NASDAQ:AKAM)
Follow Akamai Technologies Inc (NASDAQ:AKAM)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Sergey Nivens/Shutterstock.com
Now, let’s analyze the latest action encompassing Akamai Technologies, Inc. (NASDAQ:AKAM).
How have hedgies been trading Akamai Technologies, Inc. (NASDAQ:AKAM)?
At Q3’s end, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the second quarter of 2016. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, David Blood and Al Gore’s Generation Investment Management has the biggest position in Akamai Technologies, Inc. (NASDAQ:AKAM), worth close to $269.5 million, comprising 2.9% of its total 13F portfolio. The second largest stake is held by Clifton S. Robbins of Blue Harbour Group, with a $135.6 million position; 5% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish consist of John Overdeck and David Siegel’s Two Sigma Advisors, Cliff Asness’s AQR Capital Management.
Now, key money managers have been driving this bullishness. Blue Harbour Group, managed by Clifton S. Robbins, established the most outsized position in Akamai Technologies, Inc. (NASDAQ:AKAM). Blue Harbour Group had $135.6 million invested in the company at the end of the quarter. Thomas E. Claugus’s GMT Capital also initiated a $26.4 million position during the quarter. The other funds with brand new AKAM positions are John C. Walker’s Stonerise Capital Management, Ken Griffin’s Citadel Investment Group, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Akamai Technologies, Inc. (NASDAQ:AKAM) but similarly valued. We will take a look at WestRock Co (NYSE:WRK), Mettler-Toledo International Inc. (NYSE:MTD), Total System Services, Inc. (NYSE:TSS), and CNH Industrial NV (NYSE:CNHI). All of these stocks’ market caps are closest to AKAM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WRK | 29 | 752003 | 4 |
| MTD | 21 | 484521 | 1 |
| TSS | 32 | 430356 | 0 |
| CNHI | 15 | 406927 | -1 |
As you can see these stocks had an average of 24.25 hedge funds with bullish positions and the average amount invested in these stocks was $518 million. That figure was $707 million in AKAM’s case. Total System Services, Inc. (NYSE:TSS) is the most popular stock in this table. On the other hand CNH Industrial NV (NYSE:CNHI) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Akamai Technologies, Inc. (NASDAQ:AKAM) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Suggested Articles:
Least Racist States In America
Most Racist Cities In America Ranked By Hate Crimes
Best Rap Remixes of Popular Songs
Disclosure: None
