While the market driven by short-term sentiment influenced by the accomodative interest rate environment in the US, increasing oil prices and deteriorating expectations towards the resolution of the trade war with China, many smart money investors kept their cautious approach regarding the current bull run in the second quarter and hedging or reducing many of their long positions. Some fund managers like this one are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Anaplan, Inc. (NYSE:PLAN).
Anaplan, Inc. (NYSE:PLAN) was in 37 hedge funds’ portfolios at the end of the second quarter of 2019. PLAN has experienced an increase in support from the world’s most elite money managers in recent months. There were 22 hedge funds in our database with PLAN positions at the end of the previous quarter. Our calculations also showed that PLAN isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most investors, hedge funds are assumed to be underperforming, outdated investment tools of yesteryear. While there are more than 8000 funds with their doors open at present, Our experts look at the elite of this group, approximately 750 funds. These money managers orchestrate the majority of the smart money’s total asset base, and by observing their inimitable investments, Insider Monkey has deciphered many investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship hedge fund strategy outrun the S&P 500 index by around 5 percentage points per annum since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike this former hedge fund manager who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s view the recent hedge fund action encompassing Anaplan, Inc. (NYSE:PLAN).
How have hedgies been trading Anaplan, Inc. (NYSE:PLAN)?
At Q2’s end, a total of 37 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 68% from one quarter earlier. By comparison, 0 hedge funds held shares or bullish call options in PLAN a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Coatue Management, managed by Philippe Laffont, holds the biggest position in Anaplan, Inc. (NYSE:PLAN). Coatue Management has a $611.2 million position in the stock, comprising 5.2% of its 13F portfolio. On Coatue Management’s heels is Melvin Capital Management, led by Gabriel Plotkin, holding a $175.5 million position; 1.8% of its 13F portfolio is allocated to the company. Some other professional money managers that are bullish encompass Ken Griffin’s Citadel Investment Group, Panayotis Takis Sparaggis’s Alkeon Capital Management and James Crichton’s Hitchwood Capital Management.
Now, key hedge funds have jumped into Anaplan, Inc. (NYSE:PLAN) headfirst. Melvin Capital Management, managed by Gabriel Plotkin, created the biggest position in Anaplan, Inc. (NYSE:PLAN). Melvin Capital Management had $175.5 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also initiated a $88.7 million position during the quarter. The other funds with new positions in the stock are Leon Shaulov’s Maplelane Capital, David Fiszel’s Honeycomb Asset Management, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s check out hedge fund activity in other stocks similar to Anaplan, Inc. (NYSE:PLAN). These stocks are Perrigo Company plc (NYSE:PRGO), CyrusOne Inc (NASDAQ:CONE), Signature Bank (NASDAQ:SBNY), and Steel Dynamics, Inc. (NASDAQ:STLD). This group of stocks’ market caps resemble PLAN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PRGO | 21 | 720516 | 3 |
| CONE | 18 | 173157 | 1 |
| SBNY | 29 | 513611 | -7 |
| STLD | 31 | 591407 | 4 |
| Average | 24.75 | 499673 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $500 million. That figure was $1639 million in PLAN’s case. Steel Dynamics, Inc. (NASDAQ:STLD) is the most popular stock in this table. On the other hand CyrusOne Inc (NASDAQ:CONE) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Anaplan, Inc. (NYSE:PLAN) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately PLAN wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on PLAN were disappointed as the stock returned -6.9% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3.
Disclosure: None. This article was originally published at Insider Monkey.
