The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 866 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about CrowdStrike Holdings, Inc. (NASDAQ:CRWD)?
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) was in 77 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 92. CRWD investors should be aware of a decrease in enthusiasm from smart money of late. There were 92 hedge funds in our database with CRWD positions at the end of the fourth quarter. Our calculations also showed that CRWD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to view the key hedge fund action regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD).
Do Hedge Funds Think CRWD Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 77 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from one quarter earlier. On the other hand, there were a total of 65 hedge funds with a bullish position in CRWD 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.
The largest stake in CrowdStrike Holdings, Inc. (NASDAQ:CRWD) was held by Tiger Global Management LLC, which reported holding $1375.6 million worth of stock at the end of December. It was followed by Matrix Capital Management with a $547.5 million position. Other investors bullish on the company included Whale Rock Capital Management, Coatue Management, and D E Shaw. In terms of the portfolio weights assigned to each position Isomer Partners allocated the biggest weight to CrowdStrike Holdings, Inc. (NASDAQ:CRWD), around 11.41% of its 13F portfolio. Matrix Capital Management is also relatively very bullish on the stock, dishing out 6.32 percent of its 13F equity portfolio to CRWD.
Judging by the fact that CrowdStrike Holdings, Inc. (NASDAQ:CRWD) has witnessed falling interest from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of money managers that elected to cut their positions entirely last quarter. At the top of the heap, Brandon Haley’s Holocene Advisors dropped the largest stake of the “upper crust” of funds tracked by Insider Monkey, valued at about $129.3 million in stock. Glen Kacher’s fund, Light Street Capital, also dropped its stock, about $80.5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 15 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as CrowdStrike Holdings, Inc. (NASDAQ:CRWD) but similarly valued. We will take a look at BCE Inc. (NYSE:BCE), Parker-Hannifin Corporation (NYSE:PH), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), Bilibili Inc. (NASDAQ:BILI), SYSCO Corporation (NYSE:SYY), Sempra Energy (NYSE:SRE), and Chipotle Mexican Grill, Inc. (NYSE:CMG). This group of stocks’ market values match CRWD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BCE | 10 | 121896 | -3 |
| PH | 43 | 1259967 | -13 |
| ERIC | 19 | 317626 | -1 |
| BILI | 53 | 3015445 | 7 |
| SYY | 42 | 2719253 | 2 |
| SRE | 27 | 596834 | -6 |
| CMG | 41 | 3037666 | 6 |
| Average | 33.6 | 1581241 | -1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.6 hedge funds with bullish positions and the average amount invested in these stocks was $1581 million. That figure was $5258 million in CRWD’s case. Bilibili Inc. (NASDAQ:BILI) is the most popular stock in this table. On the other hand BCE Inc. (NYSE:BCE) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is more popular among hedge funds. Our overall hedge fund sentiment score for CRWD is 65.1. 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 returned 25.8% in 2021 through August 6th but still managed to beat the market by 6.7 percentage points. Hedge funds were also right about betting on CRWD as the stock returned 42.9% since the end of March (through 8/6) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
