Hedge Funds Are Dumping BigCommerce Holdings, Inc. (BIGC)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 873 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 30th holdings, data that is available nowhere else. Should you consider BigCommerce Holdings, Inc. (NASDAQ:BIGC) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is BigCommerce Holdings, Inc. (NASDAQ:BIGC) undervalued? Investors who are in the know were in a pessimistic mood. The number of bullish hedge fund bets were trimmed by 5 in recent months. BigCommerce Holdings, Inc. (NASDAQ:BIGC) was in 21 hedge funds’ portfolios at the end of June. The all time high for this statistic is 26. Our calculations also showed that BIGC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Chase Coleman of Tiger Global

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a peek at the key hedge fund action surrounding BigCommerce Holdings, Inc. (NASDAQ:BIGC).

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

At Q2’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -19% from one quarter earlier. On the other hand, there were a total of 0 hedge funds with a bullish position in BIGC 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.

Among these funds, Matrix Capital Management held the most valuable stake in BigCommerce Holdings, Inc. (NASDAQ:BIGC), which was worth $305.1 million at the end of the second quarter. On the second spot was Echo Street Capital Management which amassed $113.8 million worth of shares. Tiger Global Management LLC, Islet Management, and Citadel Investment Group 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 Matrix Capital Management allocated the biggest weight to BigCommerce Holdings, Inc. (NASDAQ:BIGC), around 3.33% of its 13F portfolio. Islet Management is also relatively very bullish on the stock, setting aside 0.89 percent of its 13F equity portfolio to BIGC.

Since BigCommerce Holdings, Inc. (NASDAQ:BIGC) has experienced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there exists a select few fund managers that elected to cut their full holdings last quarter. Interestingly, Gavin Baker’s Atreides Management said goodbye to the largest investment of the 750 funds followed by Insider Monkey, valued at an estimated $21.2 million in stock. Joseph Samuels’s fund, Islet Management, also dropped its stock, about $15.9 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 5 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks similar to BigCommerce Holdings, Inc. (NASDAQ:BIGC). We will take a look at 1Life Healthcare, Inc. (NASDAQ:ONEM), PDC Energy Inc (NASDAQ:PDCE), Carter’s, Inc. (NYSE:CRI), StemCells Inc (NASDAQ:STEM), John Bean Technologies Corporation (NYSE:JBT), Galapagos NV (NASDAQ:GLPG), and Itron, Inc. (NASDAQ:ITRI). This group of stocks’ market valuations are closest to BIGC’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.4 hedge funds with bullish positions and the average amount invested in these stocks was $352 million. That figure was $603 million in BIGC’s case. 1Life Healthcare, Inc. (NASDAQ:ONEM) is the most popular stock in this table. On the other hand Itron, Inc. (NASDAQ:ITRI) is the least popular one with only 16 bullish hedge fund positions. BigCommerce Holdings, Inc. (NASDAQ:BIGC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BIGC is 38.9. 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 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately BIGC wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BIGC investors were disappointed as the stock returned -21.7% since the end of June (through 10/22) 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.

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