At Insider Monkey, we pore over the filings of more than 700 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Mimecast Limited (NASDAQ:MIME) makes for a good investment right now.
Mimecast Limited (NASDAQ:MIME) has experienced an increase in hedge fund interest lately. Our calculations also showed that MIME isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Colin Moran Abdiel Capital
Let’s analyze the key hedge fund action encompassing Mimecast Limited (NASDAQ:MIME).
What does the smart money think about Mimecast Limited (NASDAQ:MIME)?
Heading into the fourth quarter of 2018, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 30% from the previous quarter. On the other hand, there were a total of 13 hedge funds with a bullish position in MIME at the beginning of this year. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Abdiel Capital Advisors held the most valuable stake in Mimecast Limited (NASDAQ:MIME), which was worth $216.1 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $65.6 million worth of shares. Moreover, SCGE Management, Whale Rock Capital Management, and Columbus Circle Investors were also bullish on Mimecast Limited (NASDAQ:MIME), allocating a large percentage of their portfolios to this stock.
Consequently, specific money managers were leading the bulls’ herd. SCGE Management, managed by Christopher Lyle, created the biggest position in Mimecast Limited (NASDAQ:MIME). SCGE Management had $40.2 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $14.4 million investment in the stock during the quarter. The other funds with brand new MIME positions are Mark N. Diker’s Diker Management, Alexander Captain’s Cat Rock Capital, and Steve Cohen’s Point72 Asset Management.
Let’s go over hedge fund activity in other stocks similar to Mimecast Limited (NASDAQ:MIME). These stocks are Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), Artisan Partners Asset Management Inc (NYSE:APAM), Companhia Energética de Minas Gerais (NYSE:CIG), and Ebix Inc (NASDAQ:EBIX). This group of stocks’ market valuations are similar to MIME’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MDRX | 20 | 249789 | -2 |
| APAM | 13 | 124514 | 0 |
| CIG | 6 | 3508 | -1 |
| EBIX | 16 | 116046 | 2 |
| Average | 13.75 | 123464 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $123 million. That figure was $540 million in MIME’s case. Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) is the most popular stock in this table. On the other hand Companhia Energética de Minas Gerais (NYSE:CIG) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Mimecast Limited (NASDAQ:MIME) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
