Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Workiva Inc (NYSE:WK) in this article.
Workiva Inc (NYSE:WK) was in 23 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. WK shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. There were 21 hedge funds in our database with WK holdings at the end of June. Our calculations also showed that WK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Peter Rathjens of Arrowstreet 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 we’re going to go over the latest hedge fund action encompassing Workiva Inc (NYSE:WK).
Do Hedge Funds Think WK Is A Good Stock To Buy Now?
At the end of September, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the second quarter of 2021. On the other hand, there were a total of 20 hedge funds with a bullish position in WK a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
Among these funds, Praesidium Investment Management Company held the most valuable stake in Workiva Inc (NYSE:WK), which was worth $153.4 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $125.5 million worth of shares. Arrowstreet Capital, D E Shaw, and Washington Harbour Partners 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 Praesidium Investment Management Company allocated the biggest weight to Workiva Inc (NYSE:WK), around 8.5% of its 13F portfolio. Washington Harbour Partners is also relatively very bullish on the stock, dishing out 6.04 percent of its 13F equity portfolio to WK.
Consequently, key hedge funds have jumped into Workiva Inc (NYSE:WK) headfirst. Paloma Partners, managed by Donald Sussman, assembled the most outsized position in Workiva Inc (NYSE:WK). Paloma Partners had $1.7 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $1.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Algert’s Algert Global, Karim Abbadi and Edward McBride’s Centiva Capital, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s check out hedge fund activity in other stocks similar to Workiva Inc (NYSE:WK). These stocks are Tenet Healthcare Corp (NYSE:THC), RLX Technology Inc. (NYSE:RLX), Boyd Gaming Corporation (NYSE:BYD), Kohl’s Corporation (NYSE:KSS), Pilgrim’s Pride Corporation (NASDAQ:PPC), Old Republic International Corporation (NYSE:ORI), and Starwood Property Trust, Inc. (NYSE:STWD). All of these stocks’ market caps resemble WK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| THC | 47 | 1905111 | 8 |
| RLX | 11 | 251879 | -1 |
| BYD | 37 | 779407 | 1 |
| KSS | 37 | 951330 | -3 |
| PPC | 25 | 254968 | 7 |
| ORI | 20 | 357593 | -6 |
| STWD | 12 | 161117 | 1 |
| Average | 27 | 665915 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $666 million. That figure was $583 million in WK’s case. Tenet Healthcare Corp (NYSE:THC) is the most popular stock in this table. On the other hand RLX Technology Inc. (NYSE:RLX) is the least popular one with only 11 bullish hedge fund positions. Workiva Inc (NYSE:WK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WK is 53.7. 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 WK wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); WK investors were disappointed as the stock returned -4.1% 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.
