Is Tableau Software Inc (DATA) Worthy of Your Portfolio?

We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards Tableau Software Inc (NYSE:DATA), and what that likely means for the prospects of the company and its stock.

Is Tableau Software Inc (NYSE:DATA) undervalued? It looks like hedge funds are taking a bearish view, judging by the fact that the number of bullish hedge fund positions fell by five in recent months. At the end of this article we will also compare DATA to other stocks, including Synovus Financial Corp. (NYSE:SNV), The Hanover Insurance Group, Inc. (NYSE:THG), and SINA Corp (NASDAQ:SINA) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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With all of this in mind, let’s check out the new action encompassing Tableau Software Inc (NYSE:DATA).

What does the smart money think about Tableau Software Inc (NYSE:DATA)?

At the end of the third quarter, 29 funds tracked by Insider Monkey were bullish on Tableau Software, down by 15% from the end of the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Matrix Capital Management, led by David Goel and Paul Ferri, holds the number one position in Tableau Software Inc (NYSE:DATA). Matrix Capital Management has a $302.6 million position in the stock, comprising 12.7% of its 13F portfolio. Sitting at the No. 2 spot is Bain Capital’s Brookside Capital, with a $108.3 million position; 7% of its 13F portfolio is allocated to the stock. Some other members of the smart money that are bullish comprise Eric Bannasch’s Cadian Capital, Brad Gerstner’s Altimeter Capital Management, and Mick Hellman’s HMI Capital.