A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on Workday Inc (NYSE:WDAY).
Is WDAY a good stock to buy? Workday Inc (NYSE:WDAY) was in 72 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 80. WDAY has experienced an increase in hedge fund sentiment recently. There were 69 hedge funds in our database with WDAY positions at the end of the first quarter. Our calculations also showed that WDAY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Today there are numerous tools shareholders use to grade their holdings. A pair of the most useful tools are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the top investment managers can beat the broader indices by a solid margin (see the details here). 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 .
Daniel Och, Founder of OZ Management
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Do Hedge Funds Think WDAY Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 72 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. On the other hand, there were a total of 73 hedge funds with a bullish position in WDAY a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Tiger Global Management LLC, managed by Chase Coleman, holds the most valuable position in Workday Inc (NYSE:WDAY). Tiger Global Management LLC has a $985.4 million position in the stock, comprising 1.8% of its 13F portfolio. Sitting at the No. 2 spot is Lone Pine Capital, holding a $818.2 million position; 2.6% of its 13F portfolio is allocated to the company. Other members of the smart money with similar optimism include Brian Bares’s Bares Capital Management, Jaime Sterne’s Skye Global Management and Daniel S. Och’s OZ Management. In terms of the portfolio weights assigned to each position North Peak Capital allocated the biggest weight to Workday Inc (NYSE:WDAY), around 13.31% of its 13F portfolio. ROAM Global Management is also relatively very bullish on the stock, setting aside 12.02 percent of its 13F equity portfolio to WDAY.
As industrywide interest jumped, some big names have been driving this bullishness. OZ Management, managed by Daniel S. Och, established the most valuable call position in Workday Inc (NYSE:WDAY). OZ Management had $271.4 million invested in the company at the end of the quarter. Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management also initiated a $151.1 million position during the quarter. The other funds with brand new WDAY positions are Anand Parekh’s Alyeska Investment Group, Zach Schreiber’s Point State Capital, and Renaissance Technologies.
Let’s check out hedge fund activity in other stocks similar to Workday Inc (NYSE:WDAY). These stocks are Itau Unibanco Holding SA (NYSE:ITUB), Ecolab Inc. (NYSE:ECL), Northrop Grumman Corporation (NYSE:NOC), DoorDash, Inc. (NYSE:DASH), Emerson Electric Co. (NYSE:EMR), The Progressive Corporation (NYSE:PGR), and Humana Inc (NYSE:HUM). This group of stocks’ market valuations are closest to WDAY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ITUB | 16 | 431689 | 4 |
| ECL | 48 | 2773469 | 6 |
| NOC | 42 | 1053366 | 2 |
| DASH | 45 | 8924479 | 7 |
| EMR | 45 | 854279 | 0 |
| PGR | 44 | 1338423 | -1 |
| HUM | 59 | 3257015 | 6 |
| Average | 42.7 | 2661817 | 3.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 42.7 hedge funds with bullish positions and the average amount invested in these stocks was $2662 million. That figure was $5187 million in WDAY’s case. Humana Inc (NYSE:HUM) is the most popular stock in this table. On the other hand Itau Unibanco Holding SA (NYSE:ITUB) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Workday Inc (NYSE:WDAY) is more popular among hedge funds. Our overall hedge fund sentiment score for WDAY is 85. 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 returned 24.1% in 2021 through September 20th but still managed to beat the market by 6.9 percentage points. Hedge funds were also right about betting on WDAY as the stock returned 11.9% since the end of June (through 9/20) 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.
Follow Workday Inc. (NYSE:WDAY)
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Disclosure: None. This article was originally published at Insider Monkey.
