Technology stocks had a lousy start to 2022. QQQ lost 9% of its value in January. Pandemic winners are getting crushed while energy stocks are surging. Roblox lost 36%, Moderna lost 33%, and Carvana and Shopify lost 30% of their values 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 Check Point Software Technologies Ltd. (NASDAQ:CHKP) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Check Point Software Technologies Ltd. (NASDAQ:CHKP) investors should pay attention to an increase in hedge fund sentiment in recent months. Check Point Software Technologies Ltd. (NASDAQ:CHKP) was in 30 hedge funds’ portfolios at the end of September. The all time high for this statistic is 35. Our calculations also showed that CHKP 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. Now let’s go over the fresh hedge fund action surrounding Check Point Software Technologies Ltd. (NASDAQ:CHKP).
John Overdeck of Two Sigma Advisors
Do Hedge Funds Think CHKP Is A Good Stock To Buy Now?
At third quarter’s end, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CHKP over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Check Point Software Technologies Ltd. (NASDAQ:CHKP) was held by Two Sigma Advisors, which reported holding $123 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $110.8 million position. Other investors bullish on the company included Alyeska Investment Group, D E Shaw, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Te Ahumairangi Investment Management allocated the biggest weight to Check Point Software Technologies Ltd. (NASDAQ:CHKP), around 1.81% of its 13F portfolio. SG Capital Management is also relatively very bullish on the stock, setting aside 1.61 percent of its 13F equity portfolio to CHKP.
Consequently, key hedge funds have jumped into Check Point Software Technologies Ltd. (NASDAQ:CHKP) headfirst. Intrinsic Edge Capital, managed by Mark Coe, created the most valuable position in Check Point Software Technologies Ltd. (NASDAQ:CHKP). Intrinsic Edge Capital had $12.6 million invested in the company at the end of the quarter. Brad Farber’s Atika Capital also made a $6.3 million investment in the stock during the quarter. The other funds with brand new CHKP positions are Ken Grossman and Glen Schneider’s SG Capital Management, Michael Rockefeller and KarláKroeker’s Woodline Partners, and Phil Frohlich’s Prescott Group Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Check Point Software Technologies Ltd. (NASDAQ:CHKP) but similarly valued. We will take a look at Doximity Inc. (NYSE:DOCS), Franklin Resources, Inc. (NYSE:BEN), Masimo Corporation (NASDAQ:MASI), Logitech International SA (NASDAQ:LOGI), FactSet Research Systems Inc. (NYSE:FDS), Huazhu Group Limited (NASDAQ:HTHT), and Camden Property Trust (NYSE:CPT). This group of stocks’ market caps are closest to CHKP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DOCS | 19 | 554548 | 19 |
| BEN | 28 | 359424 | -2 |
| MASI | 31 | 560090 | 3 |
| LOGI | 20 | 400160 | 0 |
| FDS | 28 | 775126 | 0 |
| HTHT | 28 | 775810 | 1 |
| CPT | 23 | 419856 | 2 |
| Average | 25.3 | 549288 | 3.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.3 hedge funds with bullish positions and the average amount invested in these stocks was $549 million. That figure was $621 million in CHKP’s case. Masimo Corporation (NASDAQ:MASI) is the most popular stock in this table. On the other hand Doximity Inc. (NYSE:DOCS) is the least popular one with only 19 bullish hedge fund positions. Check Point Software Technologies Ltd. (NASDAQ:CHKP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CHKP is 77.5. 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. 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. Hedge funds were also right about betting on CHKP as the stock returned 7.1% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Check Point Software Techs Ltd (NASDAQ:CHKP)
Follow Check Point Software Techs Ltd (NASDAQ:CHKP)
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Disclosure: None. This article was originally published at Insider Monkey.
