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 second 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 Qualtrics International Inc. (NASDAQ:XM) based on that data.
Qualtrics International Inc. (NASDAQ:XM) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 37 hedge funds’ portfolios at the end of June. Our calculations also showed that XM isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Ubiquiti Inc. (NYSE:UI), Citizens Financial Group Inc (NYSE:CFG), and Restaurant Brands International Inc (NYSE:QSR) to gather more data points.
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.
Ryan Frick of Dorsal Capital
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Do Hedge Funds Think XM Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 37 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards XM over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, 0 held the most valuable stake in Qualtrics International Inc. (NASDAQ:XM), which was worth $1731 million at the end of the second quarter. On the second spot was Alkeon Capital Management which amassed $167 million worth of shares. Tiger Global Management LLC, VGI Partners, and Dorsal 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 Silver Lake Partners allocated the biggest weight to Qualtrics International Inc. (NASDAQ:XM), around 11.22% of its 13F portfolio. VGI Partners is also relatively very bullish on the stock, dishing out 7.14 percent of its 13F equity portfolio to XM.
Seeing as Qualtrics International Inc. (NASDAQ:XM) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there were a few fund managers who sold off their entire stakes heading into Q3. At the top of the heap, Josh Resnick’s Jericho Capital Asset Management dumped the biggest position of the “upper crust” of funds tracked by Insider Monkey, totaling about $32.8 million in stock, and Lone Pine Capital was right behind this move, as the fund dropped about $21.4 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Qualtrics International Inc. (NASDAQ:XM) but similarly valued. We will take a look at Ubiquiti Inc. (NYSE:UI), Citizens Financial Group Inc (NYSE:CFG), Restaurant Brands International Inc (NYSE:QSR), The Cooper Companies, Inc. (NYSE:COO), Essex Property Trust Inc (NYSE:ESS), Teledyne Technologies Incorporated (NYSE:TDY), and ORIX Corporation (NYSE:IX). This group of stocks’ market values resemble XM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UI | 23 | 285947 | 4 |
| CFG | 36 | 402274 | -5 |
| QSR | 22 | 2007862 | -4 |
| COO | 33 | 1150171 | -10 |
| ESS | 21 | 281090 | -9 |
| TDY | 36 | 1440654 | 5 |
| IX | 4 | 4271 | -1 |
| Average | 25 | 796038 | -2.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $796 million. That figure was $2430 million in XM’s case. Citizens Financial Group Inc (NYSE:CFG) is the most popular stock in this table. On the other hand ORIX Corporation (NYSE:IX) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Qualtrics International Inc. (NASDAQ:XM) is more popular among hedge funds. Our overall hedge fund sentiment score for XM is 85. 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 21.8% in 2021 through October 11th but still managed to beat the market by 4.4 percentage points. Hedge funds were also right about betting on XM as the stock returned 11.2% since the end of June (through 10/11) 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.
