In this article we will take a look at whether hedge funds think Autodesk, Inc. (NASDAQ:ADSK) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Autodesk, Inc. (NASDAQ:ADSK) investors should be aware of a decrease in support from the world’s most elite money managers in recent months. Autodesk, Inc. (NASDAQ:ADSK) was in 64 hedge funds’ portfolios at the end of June. The all time high for this statistic is 67. There were 66 hedge funds in our database with ADSK positions at the end of the first quarter. Our calculations also showed that ADSK isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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Do Hedge Funds Think ADSK Is A Good Stock To Buy Now?
At second quarter’s end, a total of 64 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from one quarter earlier. On the other hand, there were a total of 67 hedge funds with a bullish position in ADSK a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
Among these funds, Cantillon Capital Management held the most valuable stake in Autodesk, Inc. (NASDAQ:ADSK), which was worth $355.4 million at the end of the second quarter. On the second spot was Impax Asset Management which amassed $284.5 million worth of shares. Melvin Capital Management, D E Shaw, and Fisher Asset 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 Marlowe Partners allocated the biggest weight to Autodesk, Inc. (NASDAQ:ADSK), around 14.21% of its 13F portfolio. Fernbridge Capital Management is also relatively very bullish on the stock, setting aside 6.89 percent of its 13F equity portfolio to ADSK.
Seeing as Autodesk, Inc. (NASDAQ:ADSK) has experienced falling interest from the smart money, it’s easy to see that there was a specific group of funds who sold off their positions entirely heading into Q3. Interestingly, Dmitry Balyasny’s Balyasny Asset Management cut the largest position of the 750 funds tracked by Insider Monkey, comprising close to $97.2 million in stock, and Brandon Haley’s Holocene Advisors was right behind this move, as the fund cut about $66.9 million worth. These moves are interesting, as total hedge fund interest was cut by 2 funds heading into Q3.
Let’s now review hedge fund activity in other stocks similar to Autodesk, Inc. (NASDAQ:ADSK). These stocks are The Southern Company (NYSE:SO), Air Products & Chemicals, Inc. (NYSE:APD), Analog Devices, Inc. (NASDAQ:ADI), Stellantis N.V. (NYSE:STLA), Banco Santander (Brasil) SA (NYSE:BSBR), Roku, Inc. (NASDAQ:ROKU), and Boston Scientific Corporation (NYSE:BSX). This group of stocks’ market caps are similar to ADSK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SO | 37 | 606405 | 2 |
| APD | 40 | 456440 | 8 |
| ADI | 62 | 5796275 | 12 |
| STLA | 28 | 844328 | 7 |
| BSBR | 7 | 9630 | 2 |
| ROKU | 61 | 5631958 | -2 |
| BSX | 51 | 3029136 | 7 |
| Average | 40.9 | 2339167 | 5.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 40.9 hedge funds with bullish positions and the average amount invested in these stocks was $2339 million. That figure was $3201 million in ADSK’s case. Analog Devices, Inc. (NASDAQ:ADI) is the most popular stock in this table. On the other hand Banco Santander (Brasil) SA (NYSE:BSBR) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Autodesk, Inc. (NASDAQ:ADSK) is more popular among hedge funds. Our overall hedge fund sentiment score for ADSK is 81.7. 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 gained 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. Unfortunately ADSK wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ADSK were disappointed as the stock returned 0.7% since the end of the second quarter (through 9/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
