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. In this article we are going to take a look at smart money sentiment towards Cyberark Software Ltd (NASDAQ:CYBR).
Is CYBR stock a buy? Cyberark Software Ltd (NASDAQ:CYBR) investors should be aware of an increase in enthusiasm from smart money lately. Cyberark Software Ltd (NASDAQ:CYBR) was in 27 hedge funds’ portfolios at the end of December. The all time high for this statistic is 28. Our calculations also showed that CYBR isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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. Hedge funds have more than $3 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Clint Carlson of Carlson Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now 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. With all of this in mind we’re going to check out the fresh hedge fund action encompassing Cyberark Software Ltd (NASDAQ:CYBR).
Do Hedge Funds Think CYBR Is A Good Stock To Buy Now?
At Q4’s end, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CYBR over the last 22 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, RGM Capital was the largest shareholder of Cyberark Software Ltd (NASDAQ:CYBR), with a stake worth $133.8 million reported as of the end of December. Trailing RGM Capital was Polar Capital, which amassed a stake valued at $66.6 million. Point72 Asset Management, Greenvale Capital, and Athanor Capital 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 North Run Capital allocated the biggest weight to Cyberark Software Ltd (NASDAQ:CYBR), around 12.39% of its 13F portfolio. RGM Capital is also relatively very bullish on the stock, setting aside 5.84 percent of its 13F equity portfolio to CYBR.
As aggregate interest increased, some big names have been driving this bullishness. Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, created the biggest position in Cyberark Software Ltd (NASDAQ:CYBR). Polar Capital had $66.6 million invested in the company at the end of the quarter. Parvinder Thiara’s Athanor Capital also made a $33.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Brandon Haley’s Holocene Advisors, Parvinder Thiara’s Athanor Capital, and Charles Montanaro’s Montanaro Asset Management.
Let’s also examine hedge fund activity in other stocks similar to Cyberark Software Ltd (NASDAQ:CYBR). These stocks are Jefferies Financial Group Inc. (NYSE:JEF), Blueprint Medicines Corporation (NASDAQ:BPMC), Grupo Aeroportuario del Pacifico (NYSE:PAC), Lattice Semiconductor Corporation (NASDAQ:LSCC), Exelixis, Inc. (NASDAQ:EXEL), Tetra Tech, Inc. (NASDAQ:TTEK), and Littelfuse, Inc. (NASDAQ:LFUS). This group of stocks’ market valuations are similar to CYBR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JEF | 33 | 700199 | 0 |
| BPMC | 38 | 1246182 | 4 |
| PAC | 4 | 120455 | -2 |
| LSCC | 23 | 265612 | -1 |
| EXEL | 24 | 917565 | -10 |
| TTEK | 29 | 98927 | 7 |
| LFUS | 21 | 486085 | -1 |
| Average | 24.6 | 547861 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.6 hedge funds with bullish positions and the average amount invested in these stocks was $548 million. That figure was $455 million in CYBR’s case. Blueprint Medicines Corporation (NASDAQ:BPMC) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Pacifico (NYSE:PAC) is the least popular one with only 4 bullish hedge fund positions. Cyberark Software Ltd (NASDAQ:CYBR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CYBR is 69.8. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 12.3% in 2021 through April 19th and beat the market again by 0.9 percentage points. Unfortunately CYBR wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on CYBR were disappointed as the stock returned -8.7% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Cyberark Software Ltd. (NASDAQ:CYBR)
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Disclosure: None. This article was originally published at Insider Monkey.
