Splunk Inc (NASDAQ:SPLK) announced its second quarter fiscal 2016 financial results yesterday, which surpassed Wall Street’s expectations. The data analysis firm reported net revenues of $148.3 million for the second quarter, with 46% year-over-year growth. The market had revenue estimates of $136.4 million. Its non-GAAP earnings per share of $0.03 were $0.01 higher than the analysts’ figures, although the firm reported a GAAP loss of $0.44 per share. During the second quarter, Splunk Inc (NASDAQ:SPLK) signed more than 500 customers, bringing its total customer tally to over 10,000. The real-time intelligence company expanded its expertise in cyber-security offerings with the acquisition of Caspida for $190 million. Caspida is known for its expertise in behavioral analytics for the detection and mitigation of security threats. Splunk Inc (NASDAQ:SPLK) also released its outlook for its fiscal third quarter of 2016, announcing an expected revenue range of between $158 million and $160 million.
The shares of Splunk Inc (NASDAQ:SPLK) have improved by 8.97% year-to-date, not factoring in their pre-market gains this morning, with the stock up by an additional 4.30%. The smart money maintained a neutral outlook on the stock of the real-time analytics company during the second quarter, as 23 hedge funds we track held net equity positions worth $469.21 million on June 30. The aggregate holdings in Splunk Inc (NASDAQ:SPLK) were up by 16% in comparison to with March 31, although the stock’s gains of 17% mean a small amount of shares were collectively sold. Hedge fund ownership also declined by four during the quarter.
At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically delivered a monthly alpha of six basis points, though these stocks underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning 118% and beating the market by more than 60 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise rather than large-cap stocks.
Insiders of any company understand its operational patterns and management changes, helping them make the right investment choices. Imitating insiders could help average investors boost their market gains. Splunk Inc (NASDAQ:SPLK) has had significant selling activity in the past couple of weeks. Godfrey R. Sullivan, the President, CEO, and Chairman of Splunk Inc, sold 83,348 shares in August alone, with remaining holdings of 491,940 shares.
What does the smart money think about Splunk Inc (NASDAQ:SPLK)?
Let us find out the latest hedge fund activity surrounding Splunk Inc (NASDAQ:SPLK). Columbus Circle Investors, led by Donald Chiboucis, was the largest shareholder in our database at the end of the second quarter, holding 1.41 million shares worth $98.24 million. John Burbank’s Passport Capital was another investment firm holding a large position in the company, with 777,190 shares valued at $54.11 million. Pine River Capital Management and Polar Capital are other hedge funds having equity positions in Splunk Inc (NASDAQ:SPLK), owning 713,463 shares and 358,520 shares, respectively.
Among the hedge funds initiating new positions in Splunk Inc (NASDAQ:SPLK), Tiger Global Management LLC, led by Chase Coleman, topped the list, with 1.09 million shares holding a market value of $75.91 million. Criterion Capital, led by Christopher Lord, was another firm initiating an equity position, of 606,117 shares valued at $42.20 million. Some hedge funds disposed of their entire stakes in Splunk Inc (NASDAQ:SPLK) during the second quarter instead, including Millennium Management and Visium Asset Management.
The hedge funds had a neutral to slightly bearish sentiment for Splunk Inc (NASDAQ:SPLK). Couple with heavy insider selling, we would not recommend investors to initiate new positions at the moment.
Disclosure: None
