In this article we will analyze whether EPAM Systems Inc (NYSE:EPAM) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is EPAM Systems Inc (NYSE:EPAM) going to take off soon? Prominent investors were getting more bullish. The number of long hedge fund bets moved up by 9 in recent months. EPAM Systems Inc (NYSE:EPAM) was in 42 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 33. This means the bullish number of hedge fund positions in this stock currently sits at its new all time high. Our calculations also showed that EPAM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 33 hedge funds in our database with EPAM holdings at the end of June.
Richard Driehaus of Driehaus Capital
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 let’s go over the key hedge fund action regarding EPAM Systems Inc (NYSE:EPAM).
Do Hedge Funds Think EPAM Is A Good Stock To Buy Now?
At Q3’s end, a total of 42 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 27% from one quarter earlier. On the other hand, there were a total of 33 hedge funds with a bullish position in EPAM a year ago. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
Among these funds, Arrowstreet Capital held the most valuable stake in EPAM Systems Inc (NYSE:EPAM), which was worth $158.2 million at the end of the third quarter. On the second spot was Millennium Management which amassed $116.6 million worth of shares. Citadel Investment Group, Driehaus Capital, and D E Shaw 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 Brasada Capital Management allocated the biggest weight to EPAM Systems Inc (NYSE:EPAM), around 4.88% of its 13F portfolio. Navellier & Associates is also relatively very bullish on the stock, earmarking 1.83 percent of its 13F equity portfolio to EPAM.
As aggregate interest increased, key hedge funds were breaking ground themselves. D E Shaw, managed by D. E. Shaw, initiated the biggest position in EPAM Systems Inc (NYSE:EPAM). D E Shaw had $52.1 million invested in the company at the end of the quarter. James Parsons’s Junto Capital Management also initiated a $47.8 million position during the quarter. The following funds were also among the new EPAM investors: Anand Parekh’s Alyeska Investment Group, Renaissance Technologies, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s now take a look at hedge fund activity in other stocks similar to EPAM Systems Inc (NYSE:EPAM). We will take a look at Nasdaq, Inc. (NASDAQ:NDAQ), Cummins Inc. (NYSE:CMI), Barrick Gold Corporation (NYSE:GOLD), Rocket Companies, Inc. (NYSE:RKT), Mettler-Toledo International Inc. (NYSE:MTD), HubSpot Inc (NYSE:HUBS), and HP Inc. (NYSE:HPQ). This group of stocks’ market valuations resemble EPAM’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NDAQ | 21 | 257290 | -2 |
| CMI | 30 | 830044 | -15 |
| GOLD | 41 | 917695 | -6 |
| RKT | 17 | 100749 | 4 |
| MTD | 31 | 1109108 | -4 |
| HUBS | 48 | 2864600 | -6 |
| HPQ | 34 | 1043926 | -5 |
| Average | 31.7 | 1017630 | -4.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.7 hedge funds with bullish positions and the average amount invested in these stocks was $1018 million. That figure was $946 million in EPAM’s case. HubSpot Inc (NYSE:HUBS) is the most popular stock in this table. On the other hand Rocket Companies, Inc. (NYSE:RKT) is the least popular one with only 17 bullish hedge fund positions. EPAM Systems Inc (NYSE:EPAM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EPAM is 80.3. 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. 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. Hedge funds were also right about betting on EPAM as the stock returned 6.7% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
