Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Arista Networks Inc (NYSE:ANET).
Arista Networks Inc (NYSE:ANET) was in 32 hedge funds’ portfolios at the end of September. The all time high for this statistic is 35. ANET investors should be aware of a decrease in hedge fund interest recently. There were 35 hedge funds in our database with ANET holdings at the end of June. Our calculations also showed that ANET 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 let’s review the new hedge fund action regarding Arista Networks Inc (NYSE:ANET).
Do Hedge Funds Think ANET Is A Good Stock To Buy Now?
At Q3’s end, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ANET over the last 25 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
Among these funds, Point72 Asset Management held the most valuable stake in Arista Networks Inc (NYSE:ANET), which was worth $154.1 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $75.6 million worth of shares. Citadel Investment Group, Millennium Management, and Two Sigma 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 Boardman Bay Capital Management allocated the biggest weight to Arista Networks Inc (NYSE:ANET), around 3.07% of its 13F portfolio. Shellback Capital is also relatively very bullish on the stock, setting aside 1.6 percent of its 13F equity portfolio to ANET.
Due to the fact that Arista Networks Inc (NYSE:ANET) has experienced falling interest from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of fund managers that slashed their full holdings heading into Q4. At the top of the heap, Michael Rockefeller and KarláKroeker’s Woodline Partners sold off the biggest investment of the 750 funds watched by Insider Monkey, totaling about $15.6 million in stock. Richard SchimeláandáLawrence Sapanski’s fund, Cinctive Capital Management, also sold off its stock, about $8.9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds heading into Q4.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Arista Networks Inc (NYSE:ANET) but similarly valued. These stocks are Etsy Inc (NASDAQ:ETSY), V.F. Corporation (NYSE:VFC), Deutsche Bank AG (NYSE:DB), Peloton Interactive, Inc. (NASDAQ:PTON), Best Buy Co., Inc. (NYSE:BBY), Interactive Brokers Group, Inc. (NASDAQ:IBKR), and Energy Transfer L.P. (NYSE:ET). This group of stocks’ market valuations match ANET’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ETSY | 47 | 1435748 | 0 |
| VFC | 23 | 284894 | -9 |
| DB | 15 | 1795111 | -5 |
| PTON | 62 | 4634220 | -5 |
| BBY | 29 | 679878 | 2 |
| IBKR | 31 | 1477413 | -5 |
| ET | 29 | 727715 | 0 |
| Average | 33.7 | 1576426 | -3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.7 hedge funds with bullish positions and the average amount invested in these stocks was $1576 million. That figure was $488 million in ANET’s case. Peloton Interactive, Inc. (NASDAQ:PTON) is the most popular stock in this table. On the other hand Deutsche Bank AG (NYSE:DB) is the least popular one with only 15 bullish hedge fund positions. Arista Networks Inc (NYSE:ANET) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ANET is 47.5. 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. A small number of hedge funds were also right about betting on ANET as the stock returned 44.4% since the end of the third quarter (through 11/30) and outperformed the market by an even larger margin.
Follow Arista Networks Inc. (NYSE:ANET)
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Disclosure: None. This article was originally published at Insider Monkey.
