Where Do Hedge Funds Stand On Atlassian Corporation Plc (TEAM)?

At Insider Monkey, we pore over the filings of nearly 866 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of March 31st. In this article, we will use that wealth of knowledge to determine whether or not Atlassian Corporation Plc (NASDAQ:TEAM) makes for a good investment right now.

Is Atlassian Corporation Plc (NASDAQ:TEAM) the right pick for your portfolio? Investors who are in the know were getting less optimistic. The number of long hedge fund positions went down by 2 recently. Atlassian Corporation Plc (NASDAQ:TEAM) was in 67 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 69. Our calculations also showed that TEAM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 69 hedge funds in our database with TEAM positions at the end of the fourth quarter.

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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Gabriel Plotkin of Melvin Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, advertising technology one of the fastest growing industries right now, so we are checking out stock pitches like this under-the-radar adtech stock that can deliver 10x gains. We go through lists like the 10 best hydrogen fuel cell 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 take a look at the fresh hedge fund action encompassing Atlassian Corporation Plc (NASDAQ:TEAM).

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

At the end of March, a total of 67 of the hedge funds tracked by Insider Monkey were long this stock, a change of -3% from one quarter earlier. On the other hand, there were a total of 59 hedge funds with a bullish position in TEAM 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 Atlassian Corporation Plc (NASDAQ:TEAM) was held by Renaissance Technologies, which reported holding $704.2 million worth of stock at the end of December. It was followed by Lone Pine Capital with a $626.9 million position. Other investors bullish on the company included Tiger Global Management LLC, Melvin Capital Management, and Foxhaven Asset Management. In terms of the portfolio weights assigned to each position Strategy Capital allocated the biggest weight to Atlassian Corporation Plc (NASDAQ:TEAM), around 14.15% of its 13F portfolio. Foxhaven Asset Management is also relatively very bullish on the stock, earmarking 6.47 percent of its 13F equity portfolio to TEAM.

Because Atlassian Corporation Plc (NASDAQ:TEAM) has witnessed declining sentiment from hedge fund managers, we can see that there were a few money managers that elected to cut their positions entirely last quarter. It’s worth mentioning that Daniel Sundheim’s D1 Capital Partners cut the biggest stake of the 750 funds monitored by Insider Monkey, totaling about $124 million in stock, and Ryan Caldwell’s Chiron Investment Management was right behind this move, as the fund sold off about $14.8 million worth. These transactions are interesting, as total hedge fund interest dropped by 2 funds last quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Atlassian Corporation Plc (NASDAQ:TEAM) but similarly valued. These stocks are Southern Copper Corporation (NYSE:SCCO), The Blackstone Group Inc. (NYSE:BX), Moderna, Inc. (NASDAQ:MRNA), Edwards Lifesciences Corporation (NYSE:EW), Honda Motor Co Ltd (NYSE:HMC), Vodafone Group Plc (NASDAQ:VOD), and Aon plc (NYSE:AON). This group of stocks’ market valuations match TEAM’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 36 hedge funds with bullish positions and the average amount invested in these stocks was $2042 million. That figure was $3956 million in TEAM’s case. Aon plc (NYSE:AON) is the most popular stock in this table. On the other hand Honda Motor Co Ltd (NYSE:HMC) is the least popular one with only 12 bullish hedge fund positions. Atlassian Corporation Plc (NASDAQ:TEAM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TEAM is 78. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Hedge funds were also right about betting on TEAM as the stock returned 15.8% since the end of Q1 (through 6/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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