There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Tableau Software Inc (NYSE:DATA).
Is Tableau Software Inc (NYSE:DATA) a healthy stock for your portfolio? The best stock pickers are buying. The number of long hedge fund bets inched up by 5 in recent months. Our calculations also showed that data isn’t among the 30 most popular stocks among hedge funds. DATA was in 37 hedge funds’ portfolios at the end of September. There were 32 hedge funds in our database with DATA positions at the end of the previous quarter.
Why do we pay any attention at all to hedge fund sentiment? 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 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a look at the key hedge fund action regarding Tableau Software Inc (NYSE:DATA).
What does the smart money think about Tableau Software Inc (NYSE:DATA)?
Heading into the fourth quarter of 2018, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 16% from the second quarter of 2018. By comparison, 26 hedge funds held shares or bullish call options in DATA heading into this year. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
Among these funds, Altimeter Capital Management held the most valuable stake in Tableau Software Inc (NYSE:DATA), which was worth $389.4 million at the end of the third quarter. On the second spot was Matrix Capital Management which amassed $379.6 million worth of shares. Moreover, Kensico Capital, Coatue Management, and Jericho Capital Asset Management were also bullish on Tableau Software Inc (NYSE:DATA), allocating a large percentage of their portfolios to this stock.
Consequently, key hedge funds have jumped into Tableau Software Inc (NYSE:DATA) headfirst. Coatue Management, managed by Philippe Laffont, initiated the largest position in Tableau Software Inc (NYSE:DATA). Coatue Management had $165.1 million invested in the company at the end of the quarter. Adam Wolfberg and Steven Landry’s EastBay Asset Management also made a $19.5 million investment in the stock during the quarter. The other funds with brand new DATA positions are Mark Kingdon’s Kingdon Capital, Israel Englander’s Millennium Management, and Louis Bacon’s Moore Global Investments.
Let’s also examine hedge fund activity in other stocks similar to Tableau Software Inc (NYSE:DATA). We will take a look at The AES Corporation (NYSE:AES), China Eastern Airlines Corp. Ltd. (NYSE:CEA), Reinsurance Group of America Inc (NYSE:RGA), and Molina Healthcare, Inc. (NYSE:MOH). This group of stocks’ market values resemble DATA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AES | 21 | 152189 | 3 |
| CEA | 1 | 2917 | 0 |
| RGA | 21 | 674153 | 1 |
| MOH | 30 | 1522847 | 1 |
| Average | 18.25 | 588027 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $588 million. That figure was $2.14 billion in DATA’s case. Molina Healthcare, Inc. (NYSE:MOH) is the most popular stock in this table. On the other hand China Eastern Airlines Corp. Ltd. (NYSE:CEA) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Tableau Software Inc (NYSE:DATA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
