Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Five9 Inc (NASDAQ:FIVN) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Five9 Inc (NASDAQ:FIVN) shareholders have witnessed an increase in hedge fund interest lately. Five9 Inc (NASDAQ:FIVN) was in 76 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 47. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that FIVN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind we’re going to take a peek at the key hedge fund action encompassing Five9 Inc (NASDAQ:FIVN).
Do Hedge Funds Think FIVN Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 76 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 69% from the previous quarter. On the other hand, there were a total of 47 hedge funds with a bullish position in FIVN 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.
More specifically, Alkeon Capital Management was the largest shareholder of Five9 Inc (NASDAQ:FIVN), with a stake worth $480.7 million reported as of the end of September. Trailing Alkeon Capital Management was Whale Rock Capital Management, which amassed a stake valued at $367.7 million. Corvex Capital, Pentwater Capital Management, and Citadel Investment Group 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 Calixto Global Investors allocated the biggest weight to Five9 Inc (NASDAQ:FIVN), around 15.11% of its 13F portfolio. Parsifal Capital Management is also relatively very bullish on the stock, dishing out 7.3 percent of its 13F equity portfolio to FIVN.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Corvex Capital, managed by Keith Meister, established the most valuable call position in Five9 Inc (NASDAQ:FIVN). Corvex Capital had $199.7 million invested in the company at the end of the quarter. Matthew Halbower’s Pentwater Capital Management also initiated a $198.9 million position during the quarter. The other funds with new positions in the stock are Keith Meister’s Corvex Capital, Simon Sadler’s Segantii Capital, and Gil Simon’s SoMa Equity Partners.
Let’s go over hedge fund activity in other stocks similar to Five9 Inc (NASDAQ:FIVN). We will take a look at Dr. Reddy’s Laboratories Limited (NYSE:RDY), Comerica Incorporated (NYSE:CMA), Marathon Oil Corporation (NYSE:MRO), Teva Pharmaceutical Industries Limited (NYSE:TEVA), Booz Allen Hamilton Holding Corporation (NYSE:BAH), StoneCo Ltd. (NASDAQ:STNE), and Builders FirstSource, Inc. (NASDAQ:BLDR). This group of stocks’ market caps are similar to FIVN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RDY | 12 | 172681 | 1 |
| CMA | 31 | 644935 | -2 |
| MRO | 40 | 903222 | 6 |
| TEVA | 22 | 950696 | 0 |
| BAH | 23 | 198716 | -6 |
| STNE | 37 | 2215793 | -7 |
| BLDR | 53 | 2213103 | -7 |
| Average | 31.1 | 1042735 | -2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.1 hedge funds with bullish positions and the average amount invested in these stocks was $1043 million. That figure was $3598 million in FIVN’s case. Builders FirstSource, Inc. (NASDAQ:BLDR) is the most popular stock in this table. On the other hand Dr. Reddy’s Laboratories Limited (NYSE:RDY) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Five9 Inc (NASDAQ:FIVN) is more popular among hedge funds. Our overall hedge fund sentiment score for FIVN is 90. 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 gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, FIVN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FIVN were disappointed as the stock returned -21.3% since the end of the third quarter (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
Follow Five9 Inc. (NASDAQ:FIVN)
Follow Five9 Inc. (NASDAQ:FIVN)
Suggested Articles:
- 20 Most Diverse Cities in the US
- Top 15 Building Materials Companies in USA
- 15 Largest Dairy Companies In The World
Disclosure: None. This article was originally published at Insider Monkey.
