Is MDB 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. We have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider MongoDB, Inc. (NASDAQ:MDB) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is MDB stock a buy? MongoDB, Inc. (NASDAQ:MDB) was in 36 hedge funds’ portfolios at the end of December. The all time high for this statistic is 42. MDB has experienced a decrease in activity from the world’s largest hedge funds lately. There were 42 hedge funds in our database with MDB holdings at the end of September. Our calculations also showed that MDB isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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Eashwar Krishnan of Tybourne Capital Management

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 10 best battery stocks to buy 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. Keeping this in mind let’s analyze the fresh hedge fund action encompassing MongoDB, Inc. (NASDAQ:MDB).

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

At Q4’s end, a total of 36 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards MDB 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, Whale Rock Capital Management was the largest shareholder of MongoDB, Inc. (NASDAQ:MDB), with a stake worth $489.3 million reported as of the end of December. Trailing Whale Rock Capital Management was Lone Pine Capital, which amassed a stake valued at $315.9 million. Tybourne Capital Management, SQN Investors, and SRS Investment 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 SQN Investors allocated the biggest weight to MongoDB, Inc. (NASDAQ:MDB), around 10.58% of its 13F portfolio. Tybourne Capital Management is also relatively very bullish on the stock, designating 6.02 percent of its 13F equity portfolio to MDB.

Due to the fact that MongoDB, Inc. (NASDAQ:MDB) has faced falling interest from the smart money, it’s easy to see that there lies a certain “tier” of hedgies that slashed their entire stakes by the end of the fourth quarter. At the top of the heap, David Atterbury’s Whetstone Capital Advisors dropped the largest position of the “upper crust” of funds watched by Insider Monkey, valued at close to $38.9 million in stock. James Dinan’s fund, York Capital Management, also said goodbye to its stock, about $31.9 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 6 funds by the end of the fourth quarter.

Let’s check out hedge fund activity in other stocks similar to MongoDB, Inc. (NASDAQ:MDB). We will take a look at Baker Hughes Company (NYSE:BKR), Kellogg Company (NYSE:K), Telefonica S.A. (NYSE:TEF), Magna International Inc. (NYSE:MGA), Altice USA, Inc. (NYSE:ATUS), CBRE Group, Inc. (NYSE:CBRE), and West Pharmaceutical Services Inc. (NYSE:WST). This group of stocks’ market valuations are closest to MDB’s market valuation.

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As you can see these stocks had an average of 33.7 hedge funds with bullish positions and the average amount invested in these stocks was $1283 million. That figure was $2105 million in MDB’s case. Altice USA, Inc. (NYSE:ATUS) is the most popular stock in this table. On the other hand Telefonica S.A. (NYSE:TEF) is the least popular one with only 5 bullish hedge fund positions. MongoDB, Inc. (NASDAQ:MDB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MDB is 55.1. 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 7.9% in 2021 through April 1st and beat the market again by 0.4 percentage points. Unfortunately MDB wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on MDB were disappointed as the stock returned -19.1% since the end of December (through 4/1) 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.

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