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. We have processed the filings of the more than 873 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 30th holdings, data that is available nowhere else. Should you consider salesforce.com, inc. (NYSE:CRM) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is salesforce.com, inc. (NYSE:CRM) a buy right now? Money managers were getting more bullish. The number of long hedge fund positions inched up by 17 lately. salesforce.com, inc. (NYSE:CRM) was in 108 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 117. Our calculations also showed that CRM ranked 15th among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. 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 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Charles Akre of Akre Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. Recently we came across a high growth stock that has tons of hidden assets and is trading at an extremely cheap valuation. We go through lists like the 10 best growth stocks to buy 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. 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 homepage. With all of this in mind we’re going to review the new hedge fund action surrounding salesforce.com, inc. (NYSE:CRM).
Do Hedge Funds Think CRM Is A Good Stock To Buy Now?
At Q2’s end, a total of 108 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CRM over the last 24 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Fisher Asset Management, managed by Ken Fisher, holds the number one position in salesforce.com, inc. (NYSE:CRM). Fisher Asset Management has a $3.2783 billion position in the stock, comprising 2.1% of its 13F portfolio. On Fisher Asset Management’s heels is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $1.204 billion position; the fund has 1.5% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism contain Ken Griffin’s Citadel Investment Group, Charles Akre’s Akre Capital Management and David Goel and Paul Ferri’s Matrix Capital Management. In terms of the portfolio weights assigned to each position ROAM Global Management allocated the biggest weight to salesforce.com, inc. (NYSE:CRM), around 20.65% of its 13F portfolio. Greenlea Lane Capital is also relatively very bullish on the stock, earmarking 16.46 percent of its 13F equity portfolio to CRM.
Consequently, key money managers have jumped into salesforce.com, inc. (NYSE:CRM) headfirst. Akre Capital Management, managed by Charles Akre, initiated the biggest position in salesforce.com, inc. (NYSE:CRM). Akre Capital Management had $684 million invested in the company at the end of the quarter. Ricky Sandler’s Eminence Capital also initiated a $246.9 million position during the quarter. The other funds with brand new CRM positions are Edmond M. Safra’s EMS Capital, Keith Meister’s Corvex Capital, and Bijan Modanlou, Joseph Bou-Saba, and Jayaveera Kodali’s Alta Park Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as salesforce.com, inc. (NYSE:CRM) but similarly valued. We will take a look at Cisco Systems, Inc. (NASDAQ:CSCO), Eli Lilly and Company (NYSE:LLY), Pfizer Inc. (NYSE:PFE), Oracle Corporation (NYSE:ORCL), Abbott Laboratories (NYSE:ABT), AT&T Inc. (NYSE:T), and Novartis AG (NYSE:NVS). This group of stocks’ market valuations are closest to CRM’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CSCO | 60 | 4219112 | 1 |
| LLY | 64 | 2994849 | 9 |
| PFE | 67 | 2356906 | 2 |
| ORCL | 55 | 2889687 | 3 |
| ABT | 61 | 4367607 | -4 |
| T | 68 | 2896412 | 5 |
| NVS | 22 | 1798368 | 3 |
| Average | 56.7 | 3074706 | 2.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 56.7 hedge funds with bullish positions and the average amount invested in these stocks was $3075 million. That figure was $11767 million in CRM’s case. AT&T Inc. (NYSE:T) is the most popular stock in this table. On the other hand Novartis AG (NYSE:NVS) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks salesforce.com, inc. (NYSE:CRM) is more popular among hedge funds. Our overall hedge fund sentiment score for CRM is 90.7. 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 returned 26.3% in 2021 through October 29th but still managed to beat the market by 2.3 percentage points. Hedge funds were also right about betting on CRM as the stock returned 22.7% since the end of June (through 10/29) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
