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 Guidewire Software Inc (NYSE:GWRE) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Guidewire Software Inc (NYSE:GWRE) shareholders have witnessed a decrease in support from the world’s most elite money managers of late. Guidewire Software Inc (NYSE:GWRE) was in 27 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 35. There were 33 hedge funds in our database with GWRE holdings at the end of March. Our calculations also showed that GWRE 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.
Peter Rathjens of Arrowstreet Capital
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 let’s take a peek at the recent hedge fund action regarding Guidewire Software Inc (NYSE:GWRE).
Do Hedge Funds Think GWRE Is A Good Stock To Buy Now?
At the end of June, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -18% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GWRE over the last 24 quarters. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
More specifically, Stockbridge Partners was the largest shareholder of Guidewire Software Inc (NYSE:GWRE), with a stake worth $582.7 million reported as of the end of June. Trailing Stockbridge Partners was Darsana Capital Partners, which amassed a stake valued at $281.8 million. Generation Investment Management, Route One Investment Company, and Skye Global Management 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 Anabranch Capital allocated the biggest weight to Guidewire Software Inc (NYSE:GWRE), around 21.76% of its 13F portfolio. Stockbridge Partners is also relatively very bullish on the stock, earmarking 12.4 percent of its 13F equity portfolio to GWRE.
Seeing as Guidewire Software Inc (NYSE:GWRE) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few fund managers who sold off their positions entirely in the second quarter. Intriguingly, Eric W. Mandelblatt’s Soroban Capital Partners sold off the biggest position of the “upper crust” of funds monitored by Insider Monkey, worth about $114.4 million in stock, and Catherine D. Wood’s ARK Investment Management was right behind this move, as the fund said goodbye to about $41.6 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 6 funds in the second quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Guidewire Software Inc (NYSE:GWRE). We will take a look at Aspen Technology, Inc. (NASDAQ:AZPN), Store Capital Corporation (NYSE:STOR), CubeSmart (NYSE:CUBE), Alleghany Corporation (NYSE:Y), AECOM (NYSE:ACM), AptarGroup, Inc. (NYSE:ATR), and Pinnacle West Capital Corporation (NYSE:PNW). This group of stocks’ market values are similar to GWRE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AZPN | 23 | 665739 | -9 |
| STOR | 13 | 899083 | 0 |
| CUBE | 18 | 350185 | -7 |
| Y | 32 | 387432 | -2 |
| ACM | 32 | 791285 | -6 |
| ATR | 27 | 331504 | 7 |
| PNW | 18 | 143695 | 3 |
| Average | 23.3 | 509846 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.3 hedge funds with bullish positions and the average amount invested in these stocks was $510 million. That figure was $1844 million in GWRE’s case. Alleghany Corporation (NYSE:Y) is the most popular stock in this table. On the other hand Store Capital Corporation (NYSE:STOR) is the least popular one with only 13 bullish hedge fund positions. Guidewire Software Inc (NYSE:GWRE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GWRE is 59. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on GWRE as the stock returned 8.1% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Guidewire Software Inc. (NYSE:GWRE)
Follow Guidewire Software Inc. (NYSE:GWRE)
Suggested Articles:
- 11 Best T-Shirt Design Websites
- 15 Fastest Growing Biotech Companies in the US
- 15 Best Casino Stocks to Invest In
Disclosure: None. This article was originally published at Insider Monkey.
