In this article you are going to find out whether hedge funds think Anaplan, Inc. (NYSE:PLAN) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is PLAN a good stock to buy now? Investors who are in the know were in a bullish mood. The number of bullish hedge fund bets rose by 6 lately. Anaplan, Inc. (NYSE:PLAN) was in 55 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 57. Our calculations also showed that PLAN 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Michael Lowenstein of Kensico Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets. Tesla’s stock price skyrocketed, yet lithium prices are still below their 2019 highs. So, we are checking out this lithium 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 review the new hedge fund action surrounding Anaplan, Inc. (NYSE:PLAN).
What have hedge funds been doing with Anaplan, Inc. (NYSE:PLAN)?
At Q3’s end, a total of 55 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 12% from the previous quarter. On the other hand, there were a total of 44 hedge funds with a bullish position in PLAN a year ago. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Among these funds, Coatue Management held the most valuable stake in Anaplan, Inc. (NYSE:PLAN), which was worth $760.9 million at the end of the third quarter. On the second spot was Tiger Global Management LLC which amassed $425.6 million worth of shares. Kensico Capital, Steadfast Capital Management, and OZ 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 Cowbird Capital allocated the biggest weight to Anaplan, Inc. (NYSE:PLAN), around 13.25% of its 13F portfolio. Kensico Capital is also relatively very bullish on the stock, setting aside 4.83 percent of its 13F equity portfolio to PLAN.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Palestra Capital Management, managed by Andrew Immerman and Jeremy Schiffman, created the biggest position in Anaplan, Inc. (NYSE:PLAN). Palestra Capital Management had $138.1 million invested in the company at the end of the quarter. Jonathan Soros’s JS Capital also initiated a $21 million position during the quarter. The following funds were also among the new PLAN investors: Guy Shahar’s DSAM Partners, Principal Global Investors’s Columbus Circle Investors, and Mikal Patel’s Oribel Capital Management.
Let’s also examine hedge fund activity in other stocks similar to Anaplan, Inc. (NYSE:PLAN). We will take a look at ASE Technology Holding Co., Ltd. (NYSE:ASX), RenaissanceRe Holdings Ltd. (NYSE:RNR), Paylocity Holding Corp (NASDAQ:PCTY), Concho Resources Inc. (NYSE:CXO), Guidewire Software Inc (NYSE:GWRE), GCI Liberty, Inc. (NASDAQ:GLIBA), and Camden Property Trust (NYSE:CPT). All of these stocks’ market caps are closest to PLAN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ASX | 11 | 131886 | 0 |
| RNR | 37 | 806129 | -4 |
| PCTY | 27 | 505551 | 3 |
| CXO | 47 | 731966 | 3 |
| GWRE | 34 | 1087613 | 5 |
| GLIBA | 48 | 2311934 | -5 |
| CPT | 25 | 327898 | -1 |
| Average | 32.7 | 843282 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.7 hedge funds with bullish positions and the average amount invested in these stocks was $843 million. That figure was $3199 million in PLAN’s case. GCI Liberty, Inc. (NASDAQ:GLIBA) is the most popular stock in this table. On the other hand ASE Technology Holding Co., Ltd. (NYSE:ASX) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Anaplan, Inc. (NYSE:PLAN) is more popular among hedge funds. Our overall hedge fund sentiment score for PLAN is 88.9. 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 returned 31.6% in 2020 through December 2nd but still managed to beat the market by 16 percentage points. Hedge funds were also right about betting on PLAN as the stock returned 11.1% since the end of September (through 12/2) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
