The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on June 30th. We at Insider Monkey have made an extensive database of more than 873 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Snowflake Inc (NYSE:SNOW) based on those filings.
Is SNOW a good stock to buy? Snowflake Inc (NYSE:SNOW) shareholders have witnessed a decrease in enthusiasm from smart money lately. Snowflake Inc (NYSE:SNOW) was in 70 hedge funds’ portfolios at the end of June. The all time high for this statistic is 71. There were 71 hedge funds in our database with SNOW positions at the end of the first quarter. Our calculations also showed that SNOW isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
If you’d ask most stock holders, hedge funds are perceived as unimportant, old financial tools of the past. While there are more than 8000 funds in operation at the moment, Our researchers choose to focus on the top tier of this group, approximately 850 funds. These hedge fund managers shepherd the majority of the smart money’s total capital, and by paying attention to their unrivaled investments, Insider Monkey has identified a few investment strategies that have historically outpaced the broader indices. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website .
Philippe Laffont of Coatue Management
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Do Hedge Funds Think SNOW Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 70 of the hedge funds tracked by Insider Monkey were long this stock, a change of -1% from the first quarter of 2020. On the other hand, there were a total of 0 hedge funds with a bullish position in SNOW a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
Among these funds, Altimeter Capital Management held the most valuable stake in Snowflake Inc (NYSE:SNOW), which was worth $6033.3 million at the end of the second quarter. On the second spot was Berkshire Hathaway which amassed $1481.1 million worth of shares. Coatue Management, Tiger Global Management LLC, and D1 Capital Partners 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 Altimeter Capital Management allocated the biggest weight to Snowflake Inc (NYSE:SNOW), around 45.39% of its 13F portfolio. JS Capital is also relatively very bullish on the stock, designating 17.95 percent of its 13F equity portfolio to SNOW.
Seeing as Snowflake Inc (NYSE:SNOW) has witnessed falling interest from hedge fund managers, logic holds that there is a sect of money managers that elected to cut their positions entirely by the end of the second quarter. At the top of the heap, Lone Pine Capital sold off the largest stake of the 750 funds watched by Insider Monkey, valued at close to $290.6 million in stock, and Brandon Haley’s Holocene Advisors was right behind this move, as the fund dumped about $80.1 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 1 funds by the end of the second quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Snowflake Inc (NYSE:SNOW) but similarly valued. These stocks are Marsh & McLennan Companies, Inc. (NYSE:MMC), Chubb Limited (NYSE:CB), Baidu, Inc. (NASDAQ:BIDU), Westpac Banking Corporation (NYSE:WBK), Fiserv, Inc. (NASDAQ:FISV), Becton, Dickinson and Company (NYSE:BDX), and Illinois Tool Works Inc. (NYSE:ITW). This group of stocks’ market caps are closest to SNOW’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MMC | 41 | 2537494 | 4 |
| CB | 42 | 1737776 | 1 |
| BIDU | 59 | 3474215 | -30 |
| WBK | 4 | 38055 | 1 |
| FISV | 72 | 2655395 | -3 |
| BDX | 52 | 3335441 | -13 |
| ITW | 45 | 657608 | 12 |
| Average | 45 | 2062283 | -4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 45 hedge funds with bullish positions and the average amount invested in these stocks was $2062 million. That figure was $12508 million in SNOW’s case. Fiserv, Inc. (NASDAQ:FISV) is the most popular stock in this table. On the other hand Westpac Banking Corporation (NYSE:WBK) is the least popular one with only 4 bullish hedge fund positions. Snowflake Inc (NYSE:SNOW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SNOW is 82.1. 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. 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 24.1% in 2021 through September 20th and still beat the market by 6.9 percentage points. Hedge funds were also right about betting on SNOW as the stock returned 28.2% since the end of Q2 (through 9/20) 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.
