Was The Smart Money Right About Piling Into Dynatrace, Inc. (DT)?

We at Insider Monkey have gone over 887 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article, we look at what those funds think of Dynatrace, Inc. (NYSE:DT) based on that data.

Dynatrace, Inc. (NYSE:DT) was in 53 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic was previously 46. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. DT has seen an increase in hedge fund interest recently. There were 46 hedge funds in our database with DT positions at the end of the third quarter. Our calculations also showed that DT isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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Jeffrey Talpins of Element Capital

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Do Hedge Funds Think DT Is A Good Stock To Buy Now?

At fourth quarter’s end, a total of 53 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards DT over the last 22 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Coatue Management, managed by Philippe Laffont, holds the most valuable position in Dynatrace, Inc. (NYSE:DT). Coatue Management has a $279.8 million position in the stock, comprising 1% of its 13F portfolio. Coming in second is SRS Investment Management, led by Karthik Sarma, holding a $271 million position; the fund has 4.5% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions contain Mick Hellman’s HMI Capital, Ken Griffin’s Citadel Investment Group and David Goel and Paul Ferri’s Matrix Capital Management. In terms of the portfolio weights assigned to each position HMI Capital allocated the biggest weight to Dynatrace, Inc. (NYSE:DT), around 10.34% of its 13F portfolio. Shannon River Fund Management is also relatively very bullish on the stock, earmarking 7.82 percent of its 13F equity portfolio to DT.

With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Suvretta Capital Management, managed by Aaron Cowen, initiated the most valuable position in Dynatrace, Inc. (NYSE:DT). Suvretta Capital Management had $94.3 million invested in the company at the end of the quarter. Frank Fu’s CaaS Capital also made a $73.2 million investment in the stock during the quarter. The following funds were also among the new DT investors: Richard Merage’s MIG Capital, Gavin Baker’s Atreides Management, and Jeffrey Talpins’s Element Capital Management.

Let’s now take a look at hedge fund activity in other stocks similar to Dynatrace, Inc. (NYSE:DT). We will take a look at The Boston Beer Company Inc (NYSE:SAM), Wynn Resorts, Limited (NASDAQ:WYNN), Graco Inc. (NYSE:GGG), Qiagen NV (NYSE:QGEN), Atmos Energy Corporation (NYSE:ATO), Booz Allen Hamilton Holding Corporation (NYSE:BAH), and PPD, Inc. (NASDAQ:PPD). This group of stocks’ market values are similar to DT’s market value.

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As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $639 million. That figure was $2024 million in DT’s case. Wynn Resorts, Limited (NASDAQ:WYNN) is the most popular stock in this table. On the other hand Qiagen NV (NYSE:QGEN) is the least popular one with only 24 bullish hedge fund positions. Compared to these stocks Dynatrace, Inc. (NYSE:DT) is more popular among hedge funds. Our overall hedge fund sentiment score for DT 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 10 most popular stocks among hedge funds returned 90.7% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 35 percentage points. These stocks returned 13.6% in 2021 through April 30th but still managed to beat the market by 1.6 percentage points. Hedge funds were also right about betting on DT as the stock returned 20.3% since the end of December (through 4/30) 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.

Disclosure: None. This article was originally published at Insider Monkey.