The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Workiva Inc (NYSE:WK).
Workiva Inc (NYSE:WK) was in 16 hedge funds’ portfolios at the end of March. WK investors should be aware of a decrease in enthusiasm from smart money lately. There were 17 hedge funds in our database with WK positions at the end of the previous quarter. Our calculations also showed that WK isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to review the new hedge fund action encompassing Workiva Inc (NYSE:WK).
What have hedge funds been doing with Workiva Inc (NYSE:WK)?
At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -6% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards WK over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Workiva Inc (NYSE:WK) was held by Renaissance Technologies, which reported holding $48.4 million worth of stock at the end of September. It was followed by D E Shaw with a $17.5 million position. Other investors bullish on the company included Hawk Ridge Management, Millennium Management, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Hawk Ridge Management allocated the biggest weight to Workiva Inc (NYSE:WK), around 2.95% of its 13F portfolio. StackLine Partners is also relatively very bullish on the stock, setting aside 2 percent of its 13F equity portfolio to WK.
Because Workiva Inc (NYSE:WK) has faced bearish sentiment from the aggregate hedge fund industry, we can see that there is a sect of hedgies that elected to cut their entire stakes by the end of the first quarter. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dumped the largest position of the 750 funds watched by Insider Monkey, worth about $2.4 million in stock. Mika Toikka’s fund, AlphaCrest Capital Management, also dropped its stock, about $0.7 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds by the end of the first quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Workiva Inc (NYSE:WK) but similarly valued. These stocks are Central Garden & Pet Co (NASDAQ:CENT), Heartland Express, Inc. (NASDAQ:HTLD), Hailiang Education Group Inc. (NASDAQ:HLG), and FS KKR Capital Corp. (NASDAQ:FSK). All of these stocks’ market caps match WK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CENT | 19 | 108821 | 2 |
| HTLD | 11 | 28377 | -3 |
| HLG | 2 | 7859 | -1 |
| FSK | 19 | 84925 | -9 |
| Average | 12.75 | 57496 | -2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $57 million. That figure was $125 million in WK’s case. Central Garden & Pet Co (NASDAQ:CENT) is the most popular stock in this table. On the other hand Hailiang Education Group Inc. (NASDAQ:HLG) is the least popular one with only 2 bullish hedge fund positions. Workiva Inc (NYSE:WK) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th but still beat the market by 16.8 percentage points. Hedge funds were also right about betting on WK as the stock returned 71.5% in Q2 (through June 25th) 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.
