We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of FireEye Inc (NASDAQ:FEYE) based on that data.
FireEye Inc (NASDAQ:FEYE) investors should be aware of a decrease in hedge fund interest lately. FireEye Inc (NASDAQ:FEYE) was in 25 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 37. There were 31 hedge funds in our database with FEYE positions at the end of the fourth quarter. Our calculations also showed that FEYE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ken Fisher of Fisher Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. With all of this in mind we’re going to review the new hedge fund action encompassing FireEye Inc (NASDAQ:FEYE).
Do Hedge Funds Think FEYE Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -19% from the fourth quarter of 2020. On the other hand, there were a total of 32 hedge funds with a bullish position in FEYE a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Two Sigma Advisors was the largest shareholder of FireEye Inc (NASDAQ:FEYE), with a stake worth $35.1 million reported as of the end of March. Trailing Two Sigma Advisors was Renaissance Technologies, which amassed a stake valued at $34.1 million. Fisher Asset Management, Masters Capital Management, and Masters Capital 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 Trellus Management Company allocated the biggest weight to FireEye Inc (NASDAQ:FEYE), around 1.07% of its 13F portfolio. Masters Capital Management is also relatively very bullish on the stock, earmarking 0.65 percent of its 13F equity portfolio to FEYE.
Seeing as FireEye Inc (NASDAQ:FEYE) has faced falling interest from hedge fund managers, it’s safe to say that there were a few hedgies that elected to cut their positions entirely last quarter. Interestingly, Bijan Modanlou, Joseph Bou-Saba, and Jayaveera Kodali’s Alta Park Capital cut the biggest stake of the 750 funds monitored by Insider Monkey, worth close to $41.1 million in stock. Josh Resnick’s fund, Jericho Capital Asset Management, also cut its stock, about $35.5 million worth. These moves are interesting, as aggregate hedge fund interest fell by 6 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as FireEye Inc (NASDAQ:FEYE) but similarly valued. These stocks are Altair Engineering Inc. (NASDAQ:ALTR), New Residential Investment Corp (NYSE:NRZ), Novanta Inc. (NASDAQ:NOVT), SailPoint Technologies Holdings, Inc. (NYSE:SAIL), Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), Gates Industrial Corporation plc (NYSE:GTES), and Bloom Energy Corporation (NYSE:BE). This group of stocks’ market caps are closest to FEYE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ALTR | 18 | 581401 | 2 |
| NRZ | 15 | 84760 | -7 |
| NOVT | 16 | 94857 | -2 |
| SAIL | 29 | 888355 | -3 |
| IOVA | 37 | 1758518 | -4 |
| GTES | 18 | 100856 | 4 |
| BE | 22 | 108937 | 3 |
| Average | 22.1 | 516812 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.1 hedge funds with bullish positions and the average amount invested in these stocks was $517 million. That figure was $182 million in FEYE’s case. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) is the most popular stock in this table. On the other hand New Residential Investment Corp (NYSE:NRZ) is the least popular one with only 15 bullish hedge fund positions. FireEye Inc (NASDAQ:FEYE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FEYE is 42. 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 positive signal but 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 24% in 2021 through July 9th and beat the market again by 6.7 percentage points. Unfortunately FEYE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FEYE were disappointed as the stock returned 9% since the end of March (through 7/9) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
