With the third-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 fourth quarter of 2021. One of these stocks was Okta, Inc. (NASDAQ:OKTA).
Is Okta, Inc. (NASDAQ:OKTA) an excellent investment today? Money managers were getting more bullish. The number of long hedge fund bets increased by 5 recently. Okta, Inc. (NASDAQ:OKTA) was in 62 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 61. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that OKTA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind let’s go over the fresh hedge fund action regarding Okta, Inc. (NASDAQ:OKTA).
David Atterbury of Whetstone Capital Advisors
Do Hedge Funds Think OKTA Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 62 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from the second quarter of 2021. On the other hand, there were a total of 51 hedge funds with a bullish position in OKTA a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Okta, Inc. (NASDAQ:OKTA) was held by SCGE Management, which reported holding $424.1 million worth of stock at the end of September. It was followed by Whale Rock Capital Management with a $221.2 million position. Other investors bullish on the company included Steadfast Capital Management, Zevenbergen Capital Investments, and Citadel Investment Group. In terms of the portfolio weights assigned to each position SQN Investors allocated the biggest weight to Okta, Inc. (NASDAQ:OKTA), around 5.78% of its 13F portfolio. Jeneq Management is also relatively very bullish on the stock, dishing out 5.09 percent of its 13F equity portfolio to OKTA.
As aggregate interest increased, key hedge funds have jumped into Okta, Inc. (NASDAQ:OKTA) headfirst. Point72 Asset Management, managed by Steve Cohen, created the most valuable position in Okta, Inc. (NASDAQ:OKTA). Point72 Asset Management had $52.3 million invested in the company at the end of the quarter. Sanjay Venkat’s Jeneq Management also made a $33.4 million investment in the stock during the quarter. The following funds were also among the new OKTA investors: Brian Ashford-Russell and Tim Woolley’s Polar Capital, Renaissance Technologies, and David Atterbury’s Whetstone Capital Advisors.
Let’s also examine hedge fund activity in other stocks similar to Okta, Inc. (NASDAQ:OKTA). These stocks are Zscaler, Inc. (NASDAQ:ZS), Centene Corporation (NYSE:CNC), CRH PLC (NYSE:CRH), General Mills, Inc. (NYSE:GIS), SBA Communications Corporation (NASDAQ:SBAC), Yum! Brands, Inc. (NYSE:YUM), and Cloudflare, Inc. (NYSE:NET). This group of stocks’ market caps are similar to OKTA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ZS | 38 | 1624343 | 0 |
| CNC | 50 | 2431144 | 1 |
| CRH | 7 | 83127 | -2 |
| GIS | 32 | 731647 | -5 |
| SBAC | 36 | 1893871 | -7 |
| YUM | 38 | 757636 | 3 |
| NET | 50 | 958432 | 7 |
| Average | 35.9 | 1211457 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.9 hedge funds with bullish positions and the average amount invested in these stocks was $1211 million. That figure was $2262 million in OKTA’s case. Centene Corporation (NYSE:CNC) is the most popular stock in this table. On the other hand CRH PLC (NYSE:CRH) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Okta, Inc. (NASDAQ:OKTA) is more popular among hedge funds. Our overall hedge fund sentiment score for OKTA 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 gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately OKTA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on OKTA were disappointed as the stock returned -9.3% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Okta Inc. (NASDAQ:OKTA)
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Disclosure: None. This article was originally published at Insider Monkey.
