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 December 31st, so let’s proceed with the discussion of the hedge fund sentiment on ZoomInfo Technologies Inc. (NASDAQ:ZI).
Is ZI stock a buy? ZoomInfo Technologies Inc. (NASDAQ:ZI) was in 31 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 24. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. ZI has experienced an increase in enthusiasm from smart money lately. There were 22 hedge funds in our database with ZI holdings at the end of September. Our calculations also showed that ZI isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Today there are a large number of methods investors have at their disposal to value stocks. Two of the most under-the-radar methods are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the best money managers can trounce the broader indices by a solid amount (see the details here).
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind we’re going to analyze the latest hedge fund action surrounding ZoomInfo Technologies Inc. (NASDAQ:ZI).
Do Hedge Funds Think ZI Is A Good Stock To Buy Now?
At the end of December, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 41% from the third quarter of 2020. On the other hand, there were a total of 0 hedge funds with a bullish position in ZI a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in ZoomInfo Technologies Inc. (NASDAQ:ZI) was held by Lomas Capital Management, which reported holding $57.1 million worth of stock at the end of December. It was followed by Alkeon Capital Management with a $46.4 million position. Other investors bullish on the company included Shannon River Fund Management, Balyasny Asset Management, and Alyeska Investment Group. In terms of the portfolio weights assigned to each position Lomas Capital Management allocated the biggest weight to ZoomInfo Technologies Inc. (NASDAQ:ZI), around 5.48% of its 13F portfolio. One01 Capital is also relatively very bullish on the stock, earmarking 4.78 percent of its 13F equity portfolio to ZI.
There weren’t any hedge funds initiating brand new positions in the stock during the fourth quarter.
Let’s go over hedge fund activity in other stocks similar to ZoomInfo Technologies Inc. (NASDAQ:ZI). These stocks are Wheaton Precious Metals Corp. (NYSE:WPM), Expedia Group Inc (NASDAQ:EXPE), Pioneer Natural Resources Company (NYSE:PXD), Hologic, Inc. (NASDAQ:HOLX), PagSeguro Digital Ltd. (NYSE:PAGS), Check Point Software Technologies Ltd. (NASDAQ:CHKP), and SS&C Technologies Holdings, Inc. (NASDAQ:SSNC). This group of stocks’ market caps are closest to ZI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WPM | 34 | 755047 | 5 |
| EXPE | 76 | 6594558 | 12 |
| PXD | 40 | 685798 | -2 |
| HOLX | 43 | 715967 | -7 |
| PAGS | 25 | 1840597 | 1 |
| CHKP | 26 | 775145 | -1 |
| SSNC | 49 | 2623844 | -5 |
| Average | 41.9 | 1998708 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 41.9 hedge funds with bullish positions and the average amount invested in these stocks was $1999 million. That figure was $327 million in ZI’s case. Expedia Group Inc (NASDAQ:EXPE) is the most popular stock in this table. On the other hand PagSeguro Digital Ltd. (NYSE:PAGS) is the least popular one with only 25 bullish hedge fund positions. ZoomInfo Technologies Inc. (NASDAQ:ZI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ZI is 45.9. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and surpassed the market again by 1.5 percentage points. Unfortunately ZI wasn’t nearly as popular as these 30 stocks (hedge fund sentiment was quite bearish); ZI investors were disappointed as the stock returned -1.7% since the end of December (through 4/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
