Were Hedge Funds Illusioned With Autodesk, Inc. (ADSK)?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Autodesk, Inc. (NASDAQ:ADSK) based on that data and determine whether they were really smart about the stock.

Autodesk, Inc. (NASDAQ:ADSK) investors should be aware of a decrease in hedge fund interest lately. Autodesk, Inc. (NASDAQ:ADSK) was in 54 hedge funds’ portfolios at the end of September. The all time high for this statistic is 67. There were 64 hedge funds in our database with ADSK positions at the end of the second quarter. Our calculations also showed that ADSK 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. With all of this in mind let’s review the latest hedge fund action regarding Autodesk, Inc. (NASDAQ:ADSK).

William Von Mueffling of Cantillon Capital Management

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

At Q3’s end, a total of 54 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -16% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ADSK over the last 25 quarters. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Cantillon Capital Management, managed by William von Mueffling, holds the most valuable position in Autodesk, Inc. (NASDAQ:ADSK). Cantillon Capital Management has a $341.7 million position in the stock, comprising 2.3% of its 13F portfolio. The second most bullish fund manager is Impax Asset Management, managed by Ian Simm, which holds a $318.2 million position; 1.3% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish comprise Greg Poole’s Echo Street Capital Management, and Ken Fisher’s Fisher Asset Management. In terms of the portfolio weights assigned to each position Marlowe Partners allocated the biggest weight to Autodesk, Inc. (NASDAQ:ADSK), around 7.83% of its 13F portfolio. Cartenna Capital is also relatively very bullish on the stock, earmarking 5.8 percent of its 13F equity portfolio to ADSK.

Since Autodesk, Inc. (NASDAQ:ADSK) has faced declining sentiment from the aggregate hedge fund industry, we can see that there is a sect of money managers that elected to cut their full holdings heading into Q4. At the top of the heap, Gabriel Plotkin’s Melvin Capital Management dropped the largest stake of the “upper crust” of funds monitored by Insider Monkey, totaling about $272.9 million in stock, and Renaissance Technologies was right behind this move, as the fund dumped about $82.8 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 10 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Autodesk, Inc. (NASDAQ:ADSK) but similarly valued. These stocks are Banco Santander, S.A. (NYSE:SAN), VMware, Inc. (NYSE:VMW), Workday Inc (NASDAQ:WDAY), Boston Scientific Corporation (NYSE:BSX), Activision Blizzard, Inc. (NASDAQ:ATVI), Stellantis N.V. (NYSE:STLA), and Ecolab Inc. (NYSE:ECL). This group of stocks’ market caps are closest to ADSK’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 43.9 hedge funds with bullish positions and the average amount invested in these stocks was $2660 million. That figure was $2357 million in ADSK’s case. Activision Blizzard, Inc. (NASDAQ:ATVI) is the most popular stock in this table. On the other hand Banco Santander, S.A. (NYSE:SAN) is the least popular one with only 14 bullish hedge fund positions. Autodesk, Inc. (NASDAQ:ADSK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ADSK is 49.5. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 beat the market again by 3.6 percentage points. Unfortunately, ADSK wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ADSK were disappointed as the stock returned -12.4% since the end of September (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.

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