We at Insider Monkey have gone over 867 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Domo Inc. (NASDAQ:DOMO) based on that data.
Domo Inc. (NASDAQ:DOMO) was in 24 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 27. DOMO investors should pay attention to a decrease in support from the world’s most elite money managers of late. There were 25 hedge funds in our database with DOMO positions at the end of the second quarter. Our calculations also showed that DOMO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
David Atterbury of Whetstone Capital Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to view the fresh hedge fund action regarding Domo Inc. (NASDAQ:DOMO).
Do Hedge Funds Think DOMO Is A Good Stock To Buy Now?
At Q3’s end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards DOMO over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Whetstone Capital Advisors held the most valuable stake in Domo Inc. (NASDAQ:DOMO), which was worth $64.3 million at the end of the third quarter. On the second spot was Dorsal Capital Management which amassed $54.9 million worth of shares. Renaissance Technologies, Arrowstreet Capital, and Portolan Capital 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 Collaborative Holdings Management allocated the biggest weight to Domo Inc. (NASDAQ:DOMO), around 12.8% of its 13F portfolio. Whetstone Capital Advisors is also relatively very bullish on the stock, dishing out 11.24 percent of its 13F equity portfolio to DOMO.
Since Domo Inc. (NASDAQ:DOMO) has experienced bearish sentiment from the smart money, it’s safe to say that there exists a select few funds that slashed their entire stakes by the end of the third quarter. It’s worth mentioning that Ken Grossman and Glen Schneider’s SG Capital Management sold off the biggest investment of the 750 funds followed by Insider Monkey, totaling an estimated $9.9 million in stock, and Constantinos J. Christofilis’s Archon Capital Management was right behind this move, as the fund dumped about $9.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 1 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Domo Inc. (NASDAQ:DOMO) but similarly valued. We will take a look at Evolent Health Inc (NYSE:EVH), Mercury Systems Inc (NASDAQ:MRCY), Trinity Industries, Inc. (NYSE:TRN), Emergent Biosolutions Inc (NYSE:EBS), Flagstar Bancorp Inc (NYSE:FBC), Gentherm Inc (NASDAQ:THRM), and Crescent Point Energy Corp (NYSE:CPG). This group of stocks’ market valuations resemble DOMO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EVH | 33 | 539565 | 9 |
| MRCY | 21 | 112589 | 10 |
| TRN | 17 | 649277 | -3 |
| EBS | 16 | 82732 | 1 |
| FBC | 25 | 296204 | 0 |
| THRM | 18 | 165695 | 0 |
| CPG | 11 | 108975 | -2 |
| Average | 20.1 | 279291 | 2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.1 hedge funds with bullish positions and the average amount invested in these stocks was $279 million. That figure was $396 million in DOMO’s case. Evolent Health Inc (NYSE:EVH) is the most popular stock in this table. On the other hand Crescent Point Energy Corp (NYSE:CPG) is the least popular one with only 11 bullish hedge fund positions. Domo Inc. (NASDAQ:DOMO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DOMO is 60.2. 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. 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 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately DOMO wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on DOMO were disappointed as the stock returned -40.5% since the end of September (through 12/9) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
