Is Verisk Analytics, Inc. (VRSK) Going to Burn These Hedge Funds?

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Verisk Analytics, Inc. (NASDAQ:VRSK) changed recently.

Verisk Analytics, Inc. (NASDAQ:VRSK) has experienced a decrease in hedge fund interest lately. Verisk Analytics, Inc. (NASDAQ:VRSK) was in 25 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 40. There were 36 hedge funds in our database with VRSK holdings at the end of June. Our calculations also showed that VRSK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to take a look at the new hedge fund action regarding Verisk Analytics, Inc. (NASDAQ:VRSK).

Charles Akre of Akre Capital Management

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

Heading into the fourth quarter of 2021, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -31% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards VRSK over the last 25 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).

More specifically, Akre Capital Management was the largest shareholder of Verisk Analytics, Inc. (NASDAQ:VRSK), with a stake worth $489.5 million reported as of the end of September. Trailing Akre Capital Management was Impax Asset Management, which amassed a stake valued at $450.1 million. GuardCap Asset Management, Fundsmith LLP, and Echo Street Capital 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 GuardCap Asset Management allocated the biggest weight to Verisk Analytics, Inc. (NASDAQ:VRSK), around 3.02% of its 13F portfolio. Akre Capital Management is also relatively very bullish on the stock, setting aside 3.01 percent of its 13F equity portfolio to VRSK.

Due to the fact that Verisk Analytics, Inc. (NASDAQ:VRSK) has witnessed bearish sentiment from hedge fund managers, it’s safe to say that there was a specific group of hedge funds that elected to cut their full holdings heading into Q4. At the top of the heap, Israel Englander’s Millennium Management dropped the biggest position of the “upper crust” of funds tracked by Insider Monkey, comprising an estimated $86.3 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund cut about $42.8 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 11 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Verisk Analytics, Inc. (NASDAQ:VRSK) but similarly valued. We will take a look at EPAM Systems Inc (NYSE:EPAM), Nasdaq, Inc. (NASDAQ:NDAQ), Cummins Inc. (NYSE:CMI), Barrick Gold Corporation (NYSE:GOLD), Rocket Companies, Inc. (NYSE:RKT), Mettler-Toledo International Inc. (NYSE:MTD), and HubSpot Inc (NYSE:HUBS). This group of stocks’ market caps are similar to VRSK’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.9 hedge funds with bullish positions and the average amount invested in these stocks was $1004 million. That figure was $1638 million in VRSK’s case. HubSpot Inc (NYSE:HUBS) is the most popular stock in this table. On the other hand Rocket Companies, Inc. (NYSE:RKT) is the least popular one with only 17 bullish hedge fund positions. Verisk Analytics, Inc. (NASDAQ:VRSK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for VRSK is 25.7. 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 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. A small number of hedge funds were also right about betting on VRSK as the stock returned 12.1% since the end of the third quarter (through 12/9) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.