A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Fair Isaac Corporation (NYSE:FICO).
Is FICO a good stock to buy now? The best stock pickers were taking a bullish view. The number of bullish hedge fund positions moved up by 7 lately. Fair Isaac Corporation (NYSE:FICO) was in 43 hedge funds’ portfolios at the end of September. The all time high for this statistic is 45. Our calculations also showed that FICO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 take a gander at the key hedge fund action surrounding Fair Isaac Corporation (NYSE:FICO).
Do Hedge Funds Think FICO Is A Good Stock To Buy Now?
At Q3’s end, a total of 43 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from the previous quarter. The graph below displays the number of hedge funds with bullish position in FICO over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Gabriel Plotkin’s Melvin Capital Management has the biggest position in Fair Isaac Corporation (NYSE:FICO), worth close to $478.6 million, accounting for 2.4% of its total 13F portfolio. Sitting at the No. 2 spot is Ako Capital, led by Nicolai Tangen, holding a $153.9 million position; 2.4% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism contain Dev Kantesaria’s Valley Forge Capital, Richard Scott Greeder’s Broad Bay Capital and Robert Boucai’s Newbrook Capital Advisors. In terms of the portfolio weights assigned to each position Valley Forge Capital allocated the biggest weight to Fair Isaac Corporation (NYSE:FICO), around 15.71% of its 13F portfolio. Broad Bay Capital is also relatively very bullish on the stock, designating 11.71 percent of its 13F equity portfolio to FICO.
As industrywide interest jumped, some big names have jumped into Fair Isaac Corporation (NYSE:FICO) headfirst. Renaissance Technologies, assembled the biggest position in Fair Isaac Corporation (NYSE:FICO). Renaissance Technologies had $9.8 million invested in the company at the end of the quarter. Joseph Samuels’s Islet Management also made a $9.6 million investment in the stock during the quarter. The following funds were also among the new FICO investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Jinghua Yan’s TwinBeech Capital, and Qing Li’s Sciencast Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Fair Isaac Corporation (NYSE:FICO) but similarly valued. These stocks are NortonLifeLock Inc. (NASDAQ:NLOK), LINE Corporation (NYSE:LN), Trimble Inc. (NASDAQ:TRMB), Generac Holdings Inc. (NYSE:GNRC), Ceridian HCM Holding Inc. (NYSE:CDAY), Waters Corporation (NYSE:WAT), and Jacobs Engineering Group Inc. (NYSE:J). This group of stocks’ market valuations are similar to FICO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NLOK | 34 | 1047927 | -3 |
| LN | 4 | 6364 | -4 |
| TRMB | 35 | 1030261 | 9 |
| GNRC | 43 | 733948 | 7 |
| CDAY | 36 | 1809089 | 6 |
| WAT | 32 | 927887 | -6 |
| J | 27 | 920744 | -5 |
| Average | 30.1 | 925174 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.1 hedge funds with bullish positions and the average amount invested in these stocks was $925 million. That figure was $1274 million in FICO’s case. Generac Holdings Inc. (NYSE:GNRC) is the most popular stock in this table. On the other hand LINE Corporation (NYSE:LN) is the least popular one with only 4 bullish hedge fund positions. Fair Isaac Corporation (NYSE:FICO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FICO is 88.7. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on FICO as the stock returned 19.9% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
