Hedge Funds Are Souring On Procore Technologies Inc. (PCOR)

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 at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Procore Technologies Inc. (NYSE:PCOR).

Procore Technologies Inc. (NYSE:PCOR) shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately. Procore Technologies Inc. (NYSE:PCOR) was in 26 hedge funds’ portfolios at the end of September. The all time high for this statistic is 28. There were 28 hedge funds in our database with PCOR holdings at the end of June. Our calculations also showed that PCOR 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 Procore Technologies Inc. (NYSE:PCOR).

Chase Coleman of Tiger Global

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

At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PCOR over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Chase Coleman’s Tiger Global Management LLC has the biggest position in Procore Technologies Inc. (NYSE:PCOR), worth close to $851 million, comprising 1.6% of its total 13F portfolio. Sitting at the No. 2 spot is D1 Capital Partners, managed by Daniel Sundheim, which holds a $573.4 million position; the fund has 3.2% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions comprise Greg Poole’s Echo Street Capital Management, Joel Ramin’s 12 West Capital Management and Panayotis Takis Sparaggis’s Alkeon Capital Management. In terms of the portfolio weights assigned to each position Engle Capital allocated the biggest weight to Procore Technologies Inc. (NYSE:PCOR), around 6.1% of its 13F portfolio. 12 West Capital Management is also relatively very bullish on the stock, dishing out 5.64 percent of its 13F equity portfolio to PCOR.

Due to the fact that Procore Technologies Inc. (NYSE:PCOR) has experienced falling interest from the aggregate hedge fund industry, it’s safe to say that there were a few hedgies who were dropping their full holdings in the third quarter. It’s worth mentioning that Robert Pitts’s Steadfast Capital Management cut the largest position of all the hedgies watched by Insider Monkey, comprising close to $19.9 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund said goodbye to about $4.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds in the third quarter.

Let’s check out hedge fund activity in other stocks similar to Procore Technologies Inc. (NYSE:PCOR). We will take a look at Westlake Chemical Corporation (NYSE:WLK), Host Hotels and Resorts Inc (NASDAQ:HST), Darling Ingredients Inc. (NYSE:DAR), Dropbox, Inc. (NASDAQ:DBX), Globant SA (NYSE:GLOB), Atmos Energy Corporation (NYSE:ATO), and Bunge Limited (NYSE:BG). This group of stocks’ market values are similar to PCOR’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 28.3 hedge funds with bullish positions and the average amount invested in these stocks was $497 million. That figure was $2070 million in PCOR’s case. Dropbox, Inc. (NASDAQ:DBX) is the most popular stock in this table. On the other hand Host Hotels and Resorts Inc (NASDAQ:HST) is the least popular one with only 16 bullish hedge fund positions. Procore Technologies Inc. (NYSE:PCOR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PCOR is 50.9. 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 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately PCOR wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); PCOR investors were disappointed as the stock returned -8.2% since the end of September (through 12/9) 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.