The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 28 holdings, data that is available nowhere else. Should you consider Workiva Inc (NYSE:WK) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Workiva Inc (NYSE:WK) a bargain? Investors who are in the know are getting more bullish. The number of bullish hedge fund bets rose by 3 in recent months. Our calculations also showed that WK isn’t among the 30 most popular stocks among hedge funds (view the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, 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. We’re going to view the fresh hedge fund action surrounding Workiva Inc (NYSE:WK).
What have hedge funds been doing with Workiva Inc (NYSE:WK)?
Heading into the third quarter of 2019, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in WK 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.
Of the funds tracked by Insider Monkey, Renaissance Technologies has the biggest position in Workiva Inc (NYSE:WK), worth close to $102.7 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by Hawk Ridge Management, managed by David Brown, which holds a $32.4 million position; the fund has 6% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism include D. E. Shaw’s D E Shaw, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and John Overdeck and David Siegel’s Two Sigma Advisors.
Now, some big names have been driving this bullishness. GLG Partners, managed by Noam Gottesman, created the most outsized position in Workiva Inc (NYSE:WK). GLG Partners had $2.4 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also initiated a $0.7 million position during the quarter. The following funds were also among the new WK investors: Minhua Zhang’s Weld Capital Management, Joel Greenblatt’s Gotham Asset Management, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Workiva Inc (NYSE:WK) but similarly valued. We will take a look at Columbia Banking System Inc (NASDAQ:COLB), Herman Miller, Inc. (NASDAQ:MLHR), PTC Therapeutics, Inc. (NASDAQ:PTCT), and Crestwood Equity Partners LP (NYSE:CEQP). All of these stocks’ market caps are closest to WK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| COLB | 7 | 112689 | -1 |
| MLHR | 25 | 154116 | 2 |
| PTCT | 28 | 706661 | -3 |
| CEQP | 4 | 21805 | 0 |
| Average | 16 | 248818 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $249 million. That figure was $245 million in WK’s case. PTC Therapeutics, Inc. (NASDAQ:PTCT) is the most popular stock in this table. On the other hand Crestwood Equity Partners LP (NYSE:CEQP) is the least popular one with only 4 bullish hedge fund positions. Workiva Inc (NYSE:WK) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately WK wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on WK were disappointed as the stock returned -24.5% 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 so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
