Hedge Funds Are Buying NICE Ltd (NICE)

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter of 2021. One of these stocks was NICE Ltd (NASDAQ:NICE).

NICE Ltd (NASDAQ:NICE) was in 27 hedge funds’ portfolios at the end of September. The all time high for this statistic is 33. NICE investors should be aware of an increase in enthusiasm from smart money lately. There were 22 hedge funds in our database with NICE holdings at the end of June. Our calculations also showed that NICE 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 analyze the key hedge fund action surrounding NICE Ltd (NASDAQ:NICE).

Robert G. Moses of RGM Capital

Do Hedge Funds Think NICE Is A Good Stock To Buy Now?

At Q3’s end, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 23% from the previous quarter. By comparison, 26 hedge funds held shares or bullish call options in NICE a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

Among these funds, Rivulet Capital held the most valuable stake in NICE Ltd (NASDAQ:NICE), which was worth $249.9 million at the end of the third quarter. On the second spot was RGM Capital which amassed $191.8 million worth of shares. Eminence Capital, Point72 Asset Management, and Engle Capital 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 Blackcrane Capital allocated the biggest weight to NICE Ltd (NASDAQ:NICE), around 15.08% of its 13F portfolio. Rivulet Capital is also relatively very bullish on the stock, setting aside 13.04 percent of its 13F equity portfolio to NICE.

As one would reasonably expect, key money managers were leading the bulls’ herd. Praesidium Investment Management Company, managed by Kevin Oram and Peter Uddo, created the largest position in NICE Ltd (NASDAQ:NICE). Praesidium Investment Management Company had $51.8 million invested in the company at the end of the quarter. Mina Faltas’s Washington Harbour Partners also initiated a $16.7 million position during the quarter. The other funds with new positions in the stock are John Hurley’s Cavalry Asset Management, Roy Vermus and Shlomi Bracha’s Noked Capital, and Steve Zheng’s Deepcurrents Investment Group.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as NICE Ltd (NASDAQ:NICE) but similarly valued. We will take a look at Companhia Paranaense de Energia – COPEL (NYSE:ELP), VICI Properties Inc. (NYSE:VICI), HEICO Corporation (NYSE:HEI), Amcor plc (NYSE:AMCR), Quest Diagnostics Incorporated (NYSE:DGX), SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), and Teleflex Incorporated (NYSE:TFX). This group of stocks’ market caps match NICE’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.6 hedge funds with bullish positions and the average amount invested in these stocks was $905 million. That figure was $1119 million in NICE’s case. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is the most popular stock in this table. On the other hand Companhia Paranaense de Energia – COPEL (NYSE:ELP) is the least popular one with only 7 bullish hedge fund positions. NICE Ltd (NASDAQ:NICE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NICE is 57.3. 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 NICE wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); NICE investors were disappointed as the stock returned 5.9% 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.

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Disclosure: None. This article was originally published at Insider Monkey.