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 Bill.com Holdings, Inc. (NYSE:BILL) makes for a good investment right now.
Is Bill.com Holdings, Inc. (NYSE:BILL) a marvelous stock to buy now? The smart money was buying. The number of bullish hedge fund positions improved by 12 in recent months. Bill.com Holdings, Inc. (NYSE:BILL) was in 65 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 53. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BILL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 53 hedge funds in our database with BILL positions at the end of the second quarter.
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. With all of this in mind let’s go over the recent hedge fund action regarding Bill.com Holdings, Inc. (NYSE:BILL).
Colin Moran of Abdiel Capital Advisors
Do Hedge Funds Think BILL Is A Good Stock To Buy Now?
At third quarter’s end, a total of 65 of the hedge funds tracked by Insider Monkey were long this stock, a change of 23% from the previous quarter. By comparison, 44 hedge funds held shares or bullish call options in BILL a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Whale Rock Capital Management was the largest shareholder of Bill.com Holdings, Inc. (NYSE:BILL), with a stake worth $940.8 million reported as of the end of September. Trailing Whale Rock Capital Management was Melvin Capital Management, which amassed a stake valued at $694.1 million. Abdiel Capital Advisors, Melvin Capital Management, and Holocene Advisors 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 3G Capital allocated the biggest weight to Bill.com Holdings, Inc. (NYSE:BILL), around 20.9% of its 13F portfolio. Abdiel Capital Advisors is also relatively very bullish on the stock, setting aside 14.88 percent of its 13F equity portfolio to BILL.
As one would reasonably expect, key hedge funds have been driving this bullishness. Holocene Advisors, managed by Brandon Haley, created the most valuable position in Bill.com Holdings, Inc. (NYSE:BILL). Holocene Advisors had $141.1 million invested in the company at the end of the quarter. Robert Boucai’s Newbrook Capital Advisors also initiated a $38.7 million position during the quarter. The following funds were also among the new BILL investors: Gregg Moskowitz’s Interval Partners, Ravi Chopra’s Azora Capital, and Charles Clough’s Clough Capital Partners.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Bill.com Holdings, Inc. (NYSE:BILL) but similarly valued. These stocks are Li Auto Inc. (NASDAQ:LI), Laboratory Corp. of America Holdings (NYSE:LH), UiPath Inc. (NYSE:PATH), AppLovin Corporation (NASDAQ:APP), Weyerhaeuser Co. (NYSE:WY), Telefonica S.A. (NYSE:TEF), and Wayfair Inc (NYSE:W). This group of stocks’ market values match BILL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LI | 20 | 468125 | 0 |
| LH | 58 | 2706360 | 5 |
| PATH | 27 | 3629284 | 27 |
| APP | 24 | 1115983 | 24 |
| WY | 28 | 211817 | -11 |
| TEF | 5 | 12431 | 1 |
| W | 31 | 3246491 | -4 |
| Average | 27.6 | 1627213 | 6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.6 hedge funds with bullish positions and the average amount invested in these stocks was $1627 million. That figure was $4287 million in BILL’s case. Laboratory Corp. of America Holdings (NYSE:LH) is the most popular stock in this table. On the other hand Telefonica S.A. (NYSE:TEF) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Bill.com Holdings, Inc. (NYSE:BILL) is more popular among hedge funds. Our overall hedge fund sentiment score for BILL is 90. 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 gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately BILL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BILL were disappointed as the stock returned 5.2% since the end of the third quarter (through 11/30) 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 since 2019.
Follow Bill Holdings Inc. (NYSE:BILL)
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Disclosure: None. This article was originally published at Insider Monkey.
