Here is What Hedge Funds Think About Splunk Inc (SPLK)

Splunk Inc (NASDAQ:SPLK) was in 30 hedge funds’ portfolio at the end of March. SPLK investors should pay attention to an increase in enthusiasm from smart money lately. There were 25 hedge funds in our database with SPLK holdings at the end of the previous quarter.

At the moment, there are dozens of indicators market participants can use to analyze Mr. Market. Two of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite investment managers can beat the broader indices by a solid margin (see just how much).

Equally as important, optimistic insider trading sentiment is another way to parse down the world of equities. There are many stimuli for an executive to sell shares of his or her company, but only one, very clear reason why they would buy. Plenty of academic studies have demonstrated the useful potential of this tactic if “monkeys” know what to do (learn more here).

Now, it’s important to take a glance at the recent action regarding Splunk Inc (NASDAQ:SPLK).

What have hedge funds been doing with Splunk Inc (NASDAQ:SPLK)?

At Q1’s end, a total of 30 of the hedge funds we track were long in this stock, a change of 20% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings significantly.

According to our comprehensive database, Criterion Capital, managed by Christopher Lord, holds the biggest position in Splunk Inc (NASDAQ:SPLK). Criterion Capital has a $97.4 million position in the stock, comprising 3.6% of its 13F portfolio. On Criterion Capital’s heels is GLG Partners, managed by Noam Gottesman, which held a $61.6 million position; 2.3% of its 13F portfolio is allocated to the company. Remaining hedge funds that are bullish include Christopher Medlock James’s Partner Fund Management, John Burbank’s Passport Capital and Jim Simons’s Renaissance Technologies.

As industrywide interest jumped, key hedge funds have jumped into Splunk Inc (NASDAQ:SPLK) headfirst. Partner Fund Management, managed by Christopher Medlock James, established the most valuable position in Splunk Inc (NASDAQ:SPLK). Partner Fund Management had 53.1 million invested in the company at the end of the quarter. Daniel Benton’s Andor Capital Management also initiated a $40 million position during the quarter. The following funds were also among the new SPLK investors: Dmitry Balyasny’s Balyasny Asset Management, John Thaler’s JAT Capital Management, and Alex Sacerdote ‘s Whale Rock Capital Management.

What have insiders been doing with Splunk Inc (NASDAQ:SPLK)?

Insider buying is best served when the company in question has experienced transactions within the past 180 days. Over the last 180-day time period, Splunk Inc (NASDAQ:SPLK) has seen zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Splunk Inc (NASDAQ:SPLK). These stocks are MICROS Systems, Inc. (NASDAQ:MCRS), CommVault Systems, Inc. (NASDAQ:CVLT), Msci Inc (NYSE:MSCI), Fortinet Inc (NASDAQ:FTNT), and Cadence Design Systems Inc (NASDAQ:CDNS). This group of stocks belong to the application software industry and their market caps are similar to SPLK’s market cap.

With the returns exhibited by the aforementioned research, everyday investors should always watch hedge fund and insider trading sentiment, and Splunk Inc (NASDAQ:SPLK) shareholders fit into this picture quite nicely.

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