Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Gartner Inc (NYSE:IT) based on that data.
Gartner Inc (NYSE:IT) investors should be aware of an increase in hedge fund sentiment of late. Gartner Inc (NYSE:IT) was in 40 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 38. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 37 hedge funds in our database with IT positions at the end of the fourth quarter. Our calculations also showed that IT 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.
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 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. Now let’s take a look at the key hedge fund action regarding Gartner Inc (NYSE:IT).
Do Hedge Funds Think IT Is A Good Stock To Buy Now?
At Q1’s end, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the previous quarter. By comparison, 32 hedge funds held shares or bullish call options in IT 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.
Among these funds, Generation Investment Management held the most valuable stake in Gartner Inc (NYSE:IT), which was worth $898 million at the end of the fourth quarter. On the second spot was Melvin Capital Management which amassed $232.8 million worth of shares. Junto Capital Management, D E Shaw, and Candlestick 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 Nishkama Capital allocated the biggest weight to Gartner Inc (NYSE:IT), around 6.86% of its 13F portfolio. Junto Capital Management is also relatively very bullish on the stock, dishing out 3.96 percent of its 13F equity portfolio to IT.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Oribel Capital Management, managed by Mikal Patel, established the biggest position in Gartner Inc (NYSE:IT). Oribel Capital Management had $18 million invested in the company at the end of the quarter. Louis Bacon’s Moore Global Investments also initiated a $4 million position during the quarter. The following funds were also among the new IT investors: Karim Abbadi and Edward McBride’s Centiva Capital, Ran Pang’s Quantamental Technologies, and Greg Poole’s Echo Street Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Gartner Inc (NYSE:IT). We will take a look at NetApp Inc. (NASDAQ:NTAP), Monolithic Power Systems, Inc. (NASDAQ:MPWR), RLX Technology Inc. (NYSE:RLX), PTC Inc (NASDAQ:PTC), Huntington Bancshares Incorporated (NASDAQ:HBAN), Clarivate Plc (NYSE:CLVT), and HEICO Corporation (NYSE:HEI). This group of stocks’ market values resemble IT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NTAP | 26 | 317433 | -8 |
| MPWR | 32 | 531499 | 2 |
| RLX | 23 | 246890 | 23 |
| PTC | 33 | 1769676 | -5 |
| HBAN | 27 | 154261 | -2 |
| CLVT | 26 | 4720472 | -14 |
| HEI | 45 | 638128 | 1 |
| Average | 30.3 | 1196908 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.3 hedge funds with bullish positions and the average amount invested in these stocks was $1197 million. That figure was $1737 million in IT’s case. HEICO Corporation (NYSE:HEI) is the most popular stock in this table. On the other hand RLX Technology Inc. (NYSE:RLX) is the least popular one with only 23 bullish hedge fund positions. Gartner Inc (NYSE:IT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IT is 76.6. 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 gained 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Hedge funds were also right about betting on IT as the stock returned 32.5% since the end of Q1 (through 6/25) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
