We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like SVMK Inc. (NASDAQ:SVMK).
SVMK Inc. (NASDAQ:SVMK) has seen an increase in support from the world’s most elite money managers in recent months. SVMK was in 24 hedge funds’ portfolios at the end of the third quarter of 2019. There were 23 hedge funds in our database with SVMK holdings at the end of the previous quarter. Our calculations also showed that SVMK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most stock holders, hedge funds are seen as slow, old investment tools of the past. While there are over 8000 funds trading at present, Our experts hone in on the moguls of this group, approximately 750 funds. These hedge fund managers orchestrate most of all hedge funds’ total asset base, and by paying attention to their best equity investments, Insider Monkey has uncovered a few investment strategies that have historically outrun the market. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points annually since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Chase Coleman of Tiger Global
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s check out the new hedge fund action encompassing SVMK Inc. (NASDAQ:SVMK).
Hedge fund activity in SVMK Inc. (NASDAQ:SVMK)
At the end of the third quarter, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from the second quarter of 2019. By comparison, 24 hedge funds held shares or bullish call options in SVMK a year ago. So, let’s check out 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, Peter S. Park’s Park West Asset Management has the largest position in SVMK Inc. (NASDAQ:SVMK), worth close to $44.6 million, corresponding to 2.2% of its total 13F portfolio. On Park West Asset Management’s heels is Chase Coleman of Tiger Global Management, with a $39.4 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other peers that hold long positions contain Pasco Alfaro / Richard Tumure’s Miura Global Management, Ted White and Christopher Kiper’s Legion Partners Asset Management and Mark Moore’s ThornTree Capital Partners. In terms of the portfolio weights assigned to each position ThornTree Capital Partners allocated the biggest weight to SVMK Inc. (NASDAQ:SVMK), around 8.98% of its portfolio. Legion Partners Asset Management is also relatively very bullish on the stock, designating 8 percent of its 13F equity portfolio to SVMK.
As industrywide interest jumped, key money managers were breaking ground themselves. Driehaus Capital, managed by Richard Driehaus, initiated the most valuable position in SVMK Inc. (NASDAQ:SVMK). Driehaus Capital had $11.6 million invested in the company at the end of the quarter. Zachary Miller’s Parian Global Management also initiated a $6.8 million position during the quarter. The other funds with new positions in the stock are Chuck Royce’s Royce & Associates, Julian Robertson’s Tiger Management, and Brandon Haley’s Holocene Advisors.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as SVMK Inc. (NASDAQ:SVMK) but similarly valued. These stocks are Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), Covanta Holding Corporation (NYSE:CVA), Alamos Gold Inc (NYSE:AGI), and Halozyme Therapeutics, Inc. (NASDAQ:HALO). This group of stocks’ market values are closest to SVMK’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ARNA | 29 | 293133 | 0 |
| CVA | 14 | 102739 | -1 |
| AGI | 15 | 220502 | 3 |
| HALO | 24 | 154349 | 5 |
| Average | 20.5 | 192681 | 1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $193 million. That figure was $278 million in SVMK’s case. Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) is the most popular stock in this table. On the other hand Covanta Holding Corporation (NYSE:CVA) is the least popular one with only 14 bullish hedge fund positions. SVMK Inc. (NASDAQ:SVMK) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately SVMK wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SVMK were disappointed as the stock returned -0.2% during the fourth quarter (through the end of November) 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 so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
