The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded AppFolio Inc (NASDAQ:APPF) based on those filings.
AppFolio Inc (NASDAQ:APPF) shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. Our calculations also showed that APPF isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a multitude of metrics shareholders use to size up their stock investments. A couple of the best metrics are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the top investment managers can beat the market by a superb margin (see the details here).
Fred DiSanto of Ancora Advisors
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s go over the latest hedge fund action encompassing AppFolio Inc (NASDAQ:APPF).
How are hedge funds trading AppFolio Inc (NASDAQ:APPF)?
At Q1’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards APPF over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, William Crowley, William Harker, and Stephen Blass’s Ashe Capital has the biggest position in AppFolio Inc (NASDAQ:APPF), worth close to $198.8 million, amounting to 18.4% of its total 13F portfolio. The second largest stake is held by Greg Poole of Echo Street Capital Management, with a $33.5 million position; 0.7% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish encompass Mark N. Diker’s Diker Management, Bo Shan’s Gobi Capital and Frederick DiSanto’s Ancora Advisors. In terms of the portfolio weights assigned to each position Ashe Capital allocated the biggest weight to AppFolio Inc (NASDAQ:APPF), around 18.4% of its 13F portfolio. Diker Management is also relatively very bullish on the stock, earmarking 4.38 percent of its 13F equity portfolio to APPF.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Diker Management, managed by Mark N. Diker, assembled the most outsized position in AppFolio Inc (NASDAQ:APPF). Diker Management had $10.4 million invested in the company at the end of the quarter. Bo Shan’s Gobi Capital also made a $9.9 million investment in the stock during the quarter. The following funds were also among the new APPF investors: Frederick DiSanto’s Ancora Advisors, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as AppFolio Inc (NASDAQ:APPF) but similarly valued. These stocks are Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), Integra Lifesciences Holdings Corp (NASDAQ:IART), Healthcare Realty Trust Inc (NYSE:HR), and East West Bancorp, Inc. (NASDAQ:EWBC). All of these stocks’ market caps are similar to APPF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IOVA | 39 | 1344741 | 7 |
| IART | 22 | 106793 | 5 |
| HR | 11 | 37769 | -1 |
| EWBC | 25 | 180356 | -4 |
| Average | 24.25 | 417415 | 1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.25 hedge funds with bullish positions and the average amount invested in these stocks was $417 million. That figure was $272 million in APPF’s case. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) is the most popular stock in this table. On the other hand Healthcare Realty Trust Inc (NYSE:HR) is the least popular one with only 11 bullish hedge fund positions. AppFolio Inc (NASDAQ:APPF) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on APPF as the stock returned 47.6% during the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
