Where Do Hedge Funds Stand On Snowflake Inc (SNOW)?

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Snowflake Inc (NYSE:SNOW), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is Snowflake Inc (NYSE:SNOW) a buy here? Investors who are in the know were in a bullish mood. The number of long hedge fund positions advanced by 17 recently. Snowflake Inc (NYSE:SNOW) was in 71 hedge funds’ portfolios at the end of March. The all time high for this statistic is 59. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SNOW isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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Daniel Sundheim of D1 Capital

At Insider Monkey we leave no stone unturned when looking for 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 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 glance at the fresh hedge fund action encompassing Snowflake Inc (NYSE:SNOW).

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

At the end of March, a total of 71 of the hedge funds tracked by Insider Monkey were long this stock, a change of 31% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SNOW over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Brad Gerstner’s Altimeter Capital Management has the largest position in Snowflake Inc (NYSE:SNOW), worth close to $7.3876 billion, comprising 52.8% of its total 13F portfolio. On Altimeter Capital Management’s heels is Berkshire Hathaway, managed by Warren Buffett, which holds a $1.4044 billion position; 0.5% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that are bullish encompass Philippe Laffont’s Coatue Management, Chase Coleman’s Tiger Global Management LLC and Daniel Sundheim’s D1 Capital Partners. In terms of the portfolio weights assigned to each position Altimeter Capital Management allocated the biggest weight to Snowflake Inc (NYSE:SNOW), around 52.83% of its 13F portfolio. Adams Street Partners is also relatively very bullish on the stock, designating 7.06 percent of its 13F equity portfolio to SNOW.

With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Melvin Capital Management, managed by Gabriel Plotkin, established the most outsized position in Snowflake Inc (NYSE:SNOW). Melvin Capital Management had $349.7 million invested in the company at the end of the quarter. Jonathan Soros’s JS Capital also initiated a $71.5 million position during the quarter. The following funds were also among the new SNOW investors: Leon Shaulov’s Maplelane Capital, Joseph Samuels’s Islet Management, and David Fiszel’s Honeycomb Asset Management.

Let’s check out hedge fund activity in other stocks similar to Snowflake Inc (NYSE:SNOW). We will take a look at HCA Healthcare Inc (NYSE:HCA), Equinor ASA (NYSE:EQNR), VMware, Inc. (NYSE:VMW), Intercontinental Exchange Inc (NYSE:ICE), Air Products & Chemicals, Inc. (NYSE:APD), Marsh & McLennan Companies, Inc. (NYSE:MMC), and ABB Ltd (NYSE:ABB). This group of stocks’ market values resemble SNOW’s market value.

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As you can see these stocks had an average of 33.3 hedge funds with bullish positions and the average amount invested in these stocks was $1502 million. That figure was $12965 million in SNOW’s case. HCA Healthcare Inc (NYSE:HCA) is the most popular stock in this table. On the other hand Equinor ASA (NYSE:EQNR) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Snowflake Inc (NYSE:SNOW) is more popular among hedge funds. Our overall hedge fund sentiment score for SNOW 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Unfortunately SNOW wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SNOW were disappointed as the stock returned 4.9% since the end of the first quarter (through 6/11) 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 most of these stocks already outperformed the market since 2019.

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