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 Bill.com Holdings, Inc. (NYSE:BILL) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Bill.com Holdings, Inc. (NYSE:BILL) has seen an increase in support from the world’s most elite money managers in recent months. Bill.com Holdings, Inc. (NYSE:BILL) was in 65 hedge funds’ portfolios at the end of September. The all time high for this statistic is 53. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BILL 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 take a gander at the latest hedge fund action encompassing Bill.com Holdings, Inc. (NYSE:BILL).
Gabriel Plotkin of Melvin Capital Management
Do Hedge Funds Think BILL Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 65 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 23% from the second quarter of 2021. On the other hand, there were a total of 44 hedge funds with a bullish position in BILL a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Whale Rock Capital Management held the most valuable stake in Bill.com Holdings, Inc. (NYSE:BILL), which was worth $940.8 million at the end of the third quarter. On the second spot was Melvin Capital Management which amassed $694.1 million worth of shares. Abdiel Capital Advisors, Melvin Capital Management, and Holocene Advisors 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 3G Capital allocated the biggest weight to Bill.com Holdings, Inc. (NYSE:BILL), around 20.9% of its 13F portfolio. Abdiel Capital Advisors is also relatively very bullish on the stock, dishing out 14.88 percent of its 13F equity portfolio to BILL.
As industrywide interest jumped, specific money managers have been driving this bullishness. Holocene Advisors, managed by Brandon Haley, created the biggest position in Bill.com Holdings, Inc. (NYSE:BILL). Holocene Advisors had $141.1 million invested in the company at the end of the quarter. Robert Boucai’s Newbrook Capital Advisors also initiated a $38.7 million position during the quarter. The other funds with brand new BILL positions are Gregg Moskowitz’s Interval Partners, Ravi Chopra’s Azora Capital, and Charles Clough’s Clough Capital Partners.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Bill.com Holdings, Inc. (NYSE:BILL) but similarly valued. These stocks are Li Auto Inc. (NASDAQ:LI), Laboratory Corp. of America Holdings (NYSE:LH), UiPath Inc. (NYSE:PATH), AppLovin Corporation (NASDAQ:APP), Weyerhaeuser Co. (NYSE:WY), Telefonica S.A. (NYSE:TEF), and Wayfair Inc (NYSE:W). This group of stocks’ market values resemble BILL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LI | 20 | 468125 | 0 |
| LH | 58 | 2706360 | 5 |
| PATH | 27 | 3629284 | 27 |
| APP | 24 | 1115983 | 24 |
| WY | 28 | 211817 | -11 |
| TEF | 5 | 12431 | 1 |
| W | 31 | 3246491 | -4 |
| Average | 27.6 | 1627213 | 6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.6 hedge funds with bullish positions and the average amount invested in these stocks was $1627 million. That figure was $4287 million in BILL’s case. Laboratory Corp. of America Holdings (NYSE:LH) is the most popular stock in this table. On the other hand Telefonica S.A. (NYSE:TEF) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Bill.com Holdings, Inc. (NYSE:BILL) is more popular among hedge funds. Our overall hedge fund sentiment score for BILL 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, BILL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BILL were disappointed as the stock returned -29.5% 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 Bill Holdings Inc. (NYSE:BILL)
Follow Bill Holdings Inc. (NYSE:BILL)
Suggested Articles:
- 10 Best Sporting Goods Stocks To Buy Now
- Top 10 Large-Cap Healthcare Stocks to Buy Now
- 10 Best Biotech Penny Stocks To Buy
Disclosure: None. This article was originally published at Insider Monkey.
