Is BOX Stock A Buy or Sell?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2020. What do these smart investors think about Box, Inc. (NYSE:BOX)?

Is BOX stock a buy? Investors who are in the know were taking a bearish view. The number of bullish hedge fund bets went down by 10 recently. Box, Inc. (NYSE:BOX) was in 31 hedge funds’ portfolios at the end of December. The all time high for this statistic is 41. Our calculations also showed that BOX isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 41 hedge funds in our database with BOX positions at the end of the third quarter.

Jeffrey Smith of Starboard Value LP

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we’re going to check out the latest hedge fund action encompassing Box, Inc. (NYSE:BOX).

Do Hedge Funds Think BOX Is A Good Stock To Buy Now?

At Q4’s end, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of -24% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards BOX over the last 22 quarters. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

Among these funds, Starboard Value LP held the most valuable stake in Box, Inc. (NYSE:BOX), which was worth $198.1 million at the end of the fourth quarter. On the second spot was RGM Capital which amassed $135 million worth of shares. Arrowstreet Capital, Two Sigma Advisors, and Renaissance Technologies 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 RGM Capital allocated the biggest weight to Box, Inc. (NYSE:BOX), around 5.89% of its 13F portfolio. Starboard Value LP is also relatively very bullish on the stock, setting aside 5.04 percent of its 13F equity portfolio to BOX.

Judging by the fact that Box, Inc. (NYSE:BOX) has experienced declining sentiment from hedge fund managers, logic holds that there is a sect of money managers who were dropping their full holdings heading into Q1. Intriguingly, Vadim Rubinchik’s Brightlight Capital dumped the biggest investment of all the hedgies tracked by Insider Monkey, valued at an estimated $7.9 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also cut its stock, about $3.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 10 funds heading into Q1.

Let’s now review hedge fund activity in other stocks similar to Box, Inc. (NYSE:BOX). These stocks are Patterson Companies, Inc. (NASDAQ:PDCO), Blackbaud, Inc. (NASDAQ:BLKB), GrafTech International Ltd. (NYSE:EAF), Cornerstone OnDemand, Inc. (NASDAQ:CSOD), Broadstone Net Lease, Inc. (NYSE:BNL), Veracyte Inc (NASDAQ:VCYT), and MaxLinear, Inc. (NYSE:MXL). All of these stocks’ market caps resemble BOX’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.3 hedge funds with bullish positions and the average amount invested in these stocks was $236 million. That figure was $604 million in BOX’s case. Cornerstone OnDemand, Inc. (NASDAQ:CSOD) is the most popular stock in this table. On the other hand Broadstone Net Lease, Inc. (NYSE:BNL) is the least popular one with only 11 bullish hedge fund positions. Box, Inc. (NYSE:BOX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BOX is 61.2. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Hedge funds were also right about betting on BOX as the stock returned 19.4% since the end of Q4 (through 4/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.