Is EGHT Stock A Buy or Sell?

Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards 8×8, Inc. (NYSE:EGHT).

Is EGHT stock a buy? 8×8, Inc. (NYSE:EGHT) investors should pay attention to an increase in hedge fund interest lately. 8×8, Inc. (NYSE:EGHT) was in 26 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 25. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 22 hedge funds in our database with EGHT positions at the end of the third quarter. Our calculations also showed that EGHT isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Today there are several gauges shareholders put to use to value stocks. Some of the best gauges are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform their index-focused peers by a superb amount (see the details here).

Chase Coleman of Tiger Global

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. 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 let’s review the recent hedge fund action regarding 8×8, Inc. (NYSE:EGHT).

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

At fourth quarter’s end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the previous quarter. By comparison, 14 hedge funds held shares or bullish call options in EGHT a year ago. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Daniel Patrick Gibson’s Sylebra Capital Management has the number one position in 8×8, Inc. (NYSE:EGHT), worth close to $461.3 million, accounting for 11.7% of its total 13F portfolio. Sitting at the No. 2 spot is Chase Coleman of Tiger Global Management LLC, with a $310.2 million position; 0.8% of its 13F portfolio is allocated to the company. Remaining professional money managers that hold long positions include Alex Sacerdote’s Whale Rock Capital Management, Alok Agrawal’s Bloom Tree Partners and Richard Gerson and Navroz D. Udwadia’s Falcon Edge Capital. In terms of the portfolio weights assigned to each position Sylebra Capital Management allocated the biggest weight to 8×8, Inc. (NYSE:EGHT), around 11.75% of its 13F portfolio. Andar Capital is also relatively very bullish on the stock, designating 6.19 percent of its 13F equity portfolio to EGHT.

Now, key hedge funds have been driving this bullishness. Whale Rock Capital Management, managed by Alex Sacerdote, created the most outsized position in 8×8, Inc. (NYSE:EGHT). Whale Rock Capital Management had $130.3 million invested in the company at the end of the quarter. Richard Gerson and Navroz D. Udwadia’s Falcon Edge Capital also initiated a $40.9 million position during the quarter. The following funds were also among the new EGHT investors: Brian J. Higgins’s King Street Capital, Christopher Weldon’s Stamina Capital Management, and Brad Farber’s Atika Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as 8×8, Inc. (NYSE:EGHT) but similarly valued. We will take a look at Amkor Technology, Inc. (NASDAQ:AMKR), Hudson Pacific Properties Inc (NYSE:HPP), STAAR Surgical Company (NASDAQ:STAA), PS Business Parks Inc (NYSE:PSB), Stantec Inc. (NYSE:STN), SVMK Inc. (NASDAQ:SVMK), and Mimecast Limited (NASDAQ:MIME). This group of stocks’ market caps are closest to EGHT’s market cap.

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As you can see these stocks had an average of 20.7 hedge funds with bullish positions and the average amount invested in these stocks was $300 million. That figure was $1204 million in EGHT’s case. SVMK Inc. (NASDAQ:SVMK) is the most popular stock in this table. On the other hand Stantec Inc. (NYSE:STN) is the least popular one with only 7 bullish hedge fund positions. 8×8, Inc. (NYSE:EGHT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EGHT is 77. 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 EGHT wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on EGHT were disappointed as the stock returned -5.4% 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.

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