Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks aren’t doing great but many of the stocks that delivered strong returns since March are still going very strong and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment to Veeva Systems Inc (NYSE:VEEV) changed recently.
Veeva Systems Inc (NYSE:VEEV) was in 35 hedge funds’ portfolios at the end of June. The all time high for this statistics is 44. VEEV has experienced an increase in support from the world’s most elite money managers in recent months. There were 33 hedge funds in our database with VEEV positions at the end of the first quarter. Our calculations also showed that VEEV isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Donald Sussman of Paloma Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. Last week, most investors overlooked a major development because of the presidential elections: Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 biggest telecom companies to identify fast growing companies in various industries. 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 website to get excerpts of these letters in your inbox. Keeping this in mind let’s view the fresh hedge fund action encompassing Veeva Systems Inc (NYSE:VEEV).
Hedge fund activity in Veeva Systems Inc (NYSE:VEEV)
At the end of June, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards VEEV over the last 20 quarters. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in Veeva Systems Inc (NYSE:VEEV) was held by Arrowstreet Capital, which reported holding $131.4 million worth of stock at the end of June. It was followed by PEAK6 Capital Management with a $115.7 million position. Other investors bullish on the company included Citadel Investment Group, Citadel Investment Group, and Zevenbergen Capital Investments. In terms of the portfolio weights assigned to each position Navellier & Associates allocated the biggest weight to Veeva Systems Inc (NYSE:VEEV), around 4.04% of its 13F portfolio. Aubrey Capital Management is also relatively very bullish on the stock, setting aside 1.77 percent of its 13F equity portfolio to VEEV.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, established the most valuable position in Veeva Systems Inc (NYSE:VEEV). Citadel Investment Group had $62.2 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $32.3 million position during the quarter. The other funds with new positions in the stock are Andrew Dalrymple and Barry McCorkell’s Aubrey Capital Management, Qing Li’s Sciencast Management, and Donald Sussman’s Paloma Partners.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Veeva Systems Inc (NYSE:VEEV) but similarly valued. We will take a look at Eaton Corporation plc (NYSE:ETN), Las Vegas Sands Corp. (NYSE:LVS), Canadian Pacific Railway Limited (NYSE:CP), Eni SpA (NYSE:E), Kinder Morgan Inc (NYSE:KMI), Sempra Energy (NYSE:SRE), and Snap Inc. (NYSE:SNAP). All of these stocks’ market caps match VEEV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ETN | 34 | 560308 | -1 |
| LVS | 47 | 2396746 | 5 |
| CP | 36 | 1635509 | 4 |
| E | 8 | 43125 | 3 |
| KMI | 50 | 1090828 | 3 |
| SRE | 35 | 635290 | 8 |
| SNAP | 49 | 1601957 | 1 |
| Average | 37 | 1137680 | 3.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 37 hedge funds with bullish positions and the average amount invested in these stocks was $1138 million. That figure was $530 million in VEEV’s case. Kinder Morgan Inc (NYSE:KMI) is the most popular stock in this table. On the other hand Eni SpA (NYSE:E) is the least popular one with only 8 bullish hedge fund positions. Veeva Systems Inc (NYSE:VEEV) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for VEEV is 63. 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 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 23% in 2020 through October 30th and still beat the market by 20.1 percentage points. A small number of hedge funds were also right about betting on VEEV as the stock returned 15.2% since the end of the second quarter (through 10/30) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
