Before we spend days researching a stock idea we’d like to take a look at how hedge funds and billionaire investors recently traded that stock. S&P 500 Index ETF (SPY) lost 13.5% in the fourth quarter. Seven out of 11 industry groups in the S&P 500 Index were down more than 20% from their 52-week highs at the trough of the stock market crash. The average return of a randomly picked stock in the index was even worse. This means you (or a monkey throwing a dart) have less than an even chance of beating the market by randomly picking a stock. On the other hand, the top 15 most popular S&P 500 stocks among hedge funds not only recouped their Q4 losses but also outperformed the index by more than 3 percentage points. In this article, we will take a look at what hedge funds think about SailPoint Technologies Holdings, Inc. (NYSE:SAIL).
Is SailPoint Technologies Holdings, Inc. (NYSE:SAIL) a buy, sell, or hold? Investors who are in the know are becoming more confident. The number of bullish hedge fund positions increased by 5 recently. Our calculations also showed that sail isn’t among the 30 most popular stocks among hedge funds. SAIL was in 22 hedge funds’ portfolios at the end of December. There were 17 hedge funds in our database with SAIL holdings at the end of the previous quarter.
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 32 percentage points since May 2014 through March 12, 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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a look at the new hedge fund action regarding SailPoint Technologies Holdings, Inc. (NYSE:SAIL).
What have hedge funds been doing with SailPoint Technologies Holdings, Inc. (NYSE:SAIL)?
Heading into the first quarter of 2019, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 29% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SAIL over the last 14 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Point72 Asset Management was the largest shareholder of SailPoint Technologies Holdings, Inc. (NYSE:SAIL), with a stake worth $48.2 million reported as of the end of September. Trailing Point72 Asset Management was Element Capital Management, which amassed a stake valued at $18.9 million. Laurion Capital Management, Sandler Capital Management, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.
Consequently, specific money managers have been driving this bullishness. Parian Global Management, managed by Zachary Miller, created the largest position in SailPoint Technologies Holdings, Inc. (NYSE:SAIL). Parian Global Management had $11.7 million invested in the company at the end of the quarter. Parvinder Thiara’s Athanor Capital also initiated a $6.4 million position during the quarter. The following funds were also among the new SAIL investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Anand Parekh’s Alyeska Investment Group, and John Osterweis’s Osterweis Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as SailPoint Technologies Holdings, Inc. (NYSE:SAIL) but similarly valued. These stocks are Main Street Capital Corporation (NYSE:MAIN), WNS (Holdings) Limited (NYSE:WNS), Cal-Maine Foods Inc (NASDAQ:CALM), and Sally Beauty Holdings, Inc. (NYSE:SBH). All of these stocks’ market caps resemble SAIL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MAIN | 9 | 11748 | 1 |
| WNS | 16 | 141601 | 2 |
| CALM | 18 | 163244 | -3 |
| SBH | 22 | 168014 | 4 |
| Average | 16.25 | 121152 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $121 million. That figure was $167 million in SAIL’s case. Sally Beauty Holdings, Inc. (NYSE:SBH) is the most popular stock in this table. On the other hand Main Street Capital Corporation (NYSE:MAIN) is the least popular one with only 9 bullish hedge fund positions. SailPoint Technologies Holdings, Inc. (NYSE:SAIL) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on SAIL, though not to the same extent, as the stock returned 16.9% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
