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 873 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of June 30th, 2021. What do these smart investors think about Elastic N.V. (NYSE:ESTC)?
Elastic N.V. (NYSE:ESTC) was in 55 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 52. This means the bullish number of hedge fund positions in this stock currently sits at its new all time high. ESTC shareholders have witnessed an increase in activity from the world’s largest hedge funds of late. There were 52 hedge funds in our database with ESTC positions at the end of the first quarter. Our calculations also showed that ESTC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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 monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Chase Coleman of Tiger Global
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, the demand for helium is soaring and there is a helium supply shortage, so we are checking out stock pitches like this emerging helium stock. We go through lists like the 10 best EV stocks 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. Keeping this in mind we’re going to review the recent hedge fund action encompassing Elastic N.V. (NYSE:ESTC).
Do Hedge Funds Think ESTC Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 55 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards ESTC over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Sylebra Capital Management was the largest shareholder of Elastic N.V. (NYSE:ESTC), with a stake worth $642.4 million reported as of the end of June. Trailing Sylebra Capital Management was Tiger Global Management LLC, which amassed a stake valued at $585.9 million. Whale Rock Capital Management, Marcho Partners, and Point72 Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Sylebra Capital Management allocated the biggest weight to Elastic N.V. (NYSE:ESTC), around 15.94% of its 13F portfolio. Greenhaven Road Investment Management is also relatively very bullish on the stock, dishing out 11.95 percent of its 13F equity portfolio to ESTC.
As one would reasonably expect, specific money managers were breaking ground themselves. Whale Rock Capital Management, managed by Alex Sacerdote, initiated the most valuable position in Elastic N.V. (NYSE:ESTC). Whale Rock Capital Management had $322.9 million invested in the company at the end of the quarter. Gavin Baker’s Atreides Management also made a $83.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Glen Kacher’s Light Street Capital, Pasco Alfaro and Richard Turnure’s Miura Global Management, and Mark Coe’s Intrinsic Edge Capital.
Let’s also examine hedge fund activity in other stocks similar to Elastic N.V. (NYSE:ESTC). These stocks are Masimo Corporation (NASDAQ:MASI), CBOE Global Markets Inc (NASDAQ:CBOE), Lennox International Inc. (NYSE:LII), W.R. Berkley Corporation (NYSE:WRB), Vedanta Ltd (NYSE:VEDL), Equitable Holdings, Inc. (NYSE:EQH), and Hasbro, Inc. (NASDAQ:HAS). This group of stocks’ market caps resemble ESTC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MASI | 28 | 317268 | -7 |
| CBOE | 31 | 826143 | -2 |
| LII | 26 | 465734 | 1 |
| WRB | 36 | 648828 | 4 |
| VEDL | 10 | 63949 | 0 |
| EQH | 45 | 1750676 | 1 |
| HAS | 27 | 211638 | -4 |
| Average | 29 | 612034 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $612 million. That figure was $3062 million in ESTC’s case. Equitable Holdings, Inc. (NYSE:EQH) is the most popular stock in this table. On the other hand Vedanta Ltd (NYSE:VEDL) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Elastic N.V. (NYSE:ESTC) is more popular among hedge funds. Our overall hedge fund sentiment score for ESTC is 88. 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 ESTC as the stock returned 19% 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.
Follow Elastic N.v. (NYSE:ESTC)
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Disclosure: None. This article was originally published at Insider Monkey.
