Hedge Funds Have Never Been This Bullish On Bottomline Technologies, Inc. (EPAY)

With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was Bottomline Technologies, Inc. (NASDAQ:EPAY).

Bottomline Technologies, Inc. (NASDAQ:EPAY) investors should pay attention to an increase in enthusiasm from smart money in recent months. Bottomline Technologies, Inc. (NASDAQ:EPAY) was in 24 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 19 hedge funds in our database with EPAY holdings at the end of March. Our calculations also showed that EPAY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

David Brown of Hawk Ridge Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 let’s take a look at the latest hedge fund action regarding Bottomline Technologies, Inc. (NASDAQ:EPAY).

Do Hedge Funds Think EPAY Is A Good Stock To Buy Now?

At the end of June, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 26% from the first quarter of 2020. On the other hand, there were a total of 18 hedge funds with a bullish position in EPAY 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, Philip Hilal’s Clearfield Capital has the number one position in Bottomline Technologies, Inc. (NASDAQ:EPAY), worth close to $46.6 million, comprising 25.8% of its total 13F portfolio. The second most bullish fund manager is Hawk Ridge Management, led by David Brown, holding a $37.4 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Some other peers with similar optimism contain Richard Merage’s MIG Capital, Marc Majzner’s Clearline Capital and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Clearfield Capital allocated the biggest weight to Bottomline Technologies, Inc. (NASDAQ:EPAY), around 25.81% of its 13F portfolio. MIG Capital is also relatively very bullish on the stock, dishing out 3.02 percent of its 13F equity portfolio to EPAY.

Now, some big names have been driving this bullishness. Clearfield Capital, managed by Philip Hilal, created the most outsized position in Bottomline Technologies, Inc. (NASDAQ:EPAY). Clearfield Capital had $46.6 million invested in the company at the end of the quarter. David Brown’s Hawk Ridge Management also initiated a $37.4 million position during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp, Mark Kleiman’s Factorial Partners, and Ken Griffin’s Citadel Investment Group.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Bottomline Technologies, Inc. (NASDAQ:EPAY) but similarly valued. We will take a look at The E.W. Scripps Company (NASDAQ:SSP), La-Z-Boy Incorporated (NYSE:LZB), Oxford Industries, Inc. (NYSE:OXM), Smith & Wesson Brands, Inc. (NASDAQ:SWBI), Alector, Inc. (NASDAQ:ALEC), Aurinia Pharmaceuticals Inc (NASDAQ:AUPH), and Anavex Life Sciences Corp. (NASDAQ:AVXL). All of these stocks’ market caps are closest to EPAY’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.6 hedge funds with bullish positions and the average amount invested in these stocks was $142 million. That figure was $193 million in EPAY’s case. La-Z-Boy Incorporated (NYSE:LZB) is the most popular stock in this table. On the other hand Anavex Life Sciences Corp. (NASDAQ:AVXL) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Bottomline Technologies, Inc. (NASDAQ:EPAY) is more popular among hedge funds. Our overall hedge fund sentiment score for EPAY is 90. 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. 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 returned 24% in 2021 through October 22nd but still managed to beat the market by 1.6 percentage points. Hedge funds were also right about betting on EPAY as the stock returned 26.1% since the end of June (through 10/22) 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.