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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Smartsheet Inc. (NYSE:SMAR)?
Smartsheet Inc. (NYSE:SMAR) shareholders have witnessed a decrease in enthusiasm from smart money of late. Our calculations also showed that SMAR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
At the moment there are many methods stock market investors use to value their holdings. A couple of the most innovative methods are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the top investment managers can outpace the broader indices by a superb amount (see the details here).
Christian Leone of Luxor Capital Group
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a gander at the key hedge fund action surrounding Smartsheet Inc. (NYSE:SMAR).
What does smart money think about Smartsheet Inc. (NYSE:SMAR)?
Heading into the second quarter of 2020, a total of 41 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards SMAR over the last 18 quarters. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
More specifically, Whale Rock Capital Management was the largest shareholder of Smartsheet Inc. (NYSE:SMAR), with a stake worth $232.9 million reported as of the end of September. Trailing Whale Rock Capital Management was Coatue Management, which amassed a stake valued at $230.2 million. 12 West Capital Management, Tiger Global Management LLC, and Alkeon 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 12 West Capital Management allocated the biggest weight to Smartsheet Inc. (NYSE:SMAR), around 10.98% of its 13F portfolio. Cota Capital is also relatively very bullish on the stock, designating 10.21 percent of its 13F equity portfolio to SMAR.
Since Smartsheet Inc. (NYSE:SMAR) has faced declining sentiment from the smart money, it’s safe to say that there lies a certain “tier” of fund managers that slashed their positions entirely by the end of the third quarter. Intriguingly, Daryl Smith’s Kayak Investment Partners dropped the largest stake of all the hedgies followed by Insider Monkey, worth an estimated $14.9 million in stock. Peter Muller’s fund, PDT Partners, also dropped its stock, about $10.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Smartsheet Inc. (NYSE:SMAR). These stocks are Westlake Chemical Corporation (NYSE:WLK), Donaldson Company, Inc. (NYSE:DCI), Grupo Aval Acciones y Valores S.A. (NYSE:AVAL), and SolarWinds Corporation (NYSE:SWI). This group of stocks’ market valuations are similar to SMAR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WLK | 20 | 111151 | -2 |
| DCI | 20 | 125557 | -1 |
| AVAL | 5 | 10012 | -2 |
| SWI | 14 | 2141429 | -1 |
| Average | 14.75 | 597037 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $597 million. That figure was $1679 million in SMAR’s case. Westlake Chemical Corporation (NYSE:WLK) is the most popular stock in this table. On the other hand Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Smartsheet Inc. (NYSE:SMAR) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on SMAR as the stock returned 38.9% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
