Where Do Hedge Funds Stand On Workiva Inc (WK)?

The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Workiva Inc (NYSE:WK).

Workiva Inc (NYSE:WK) investors should pay attention to a decrease in support from the world’s most elite money managers recently. Workiva Inc (NYSE:WK) was in 21 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 22. Our calculations also showed that WK isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Peter Rathjens of Arrowstreet Capital

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

At the end of the second quarter, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the previous quarter. On the other hand, there were a total of 21 hedge funds with a bullish position in WK a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).

The largest stake in Workiva Inc (NYSE:WK) was held by Renaissance Technologies, which reported holding $128.9 million worth of stock at the end of June. It was followed by Praesidium Investment Management Company with a $122.9 million position. Other investors bullish on the company included D E Shaw, Washington Harbour Partners, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Washington Harbour Partners allocated the biggest weight to Workiva Inc (NYSE:WK), around 8.26% of its 13F portfolio. Praesidium Investment Management Company is also relatively very bullish on the stock, earmarking 6.56 percent of its 13F equity portfolio to WK.

Due to the fact that Workiva Inc (NYSE:WK) has faced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there is a sect of money managers who sold off their full holdings in the second quarter. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management dumped the largest investment of all the hedgies followed by Insider Monkey, worth an estimated $4.4 million in stock. Israel Englander’s fund, Millennium Management, also dropped its stock, about $2.6 million worth. These moves are interesting, as total hedge fund interest dropped by 1 funds in the second quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Workiva Inc (NYSE:WK) but similarly valued. We will take a look at National Instruments Corporation (NASDAQ:NATI), Legend Biotech Corporation (NASDAQ:LEGN), SL Green Realty Corp (NYSE:SLG), Grupo Aeroportuario del Sureste (NYSE:ASR), Pure Storage, Inc. (NYSE:PSTG), BWX Technologies Inc (NYSE:BWXT), and NeoGenomics, Inc. (NASDAQ:NEO). This group of stocks’ market caps are closest to WK’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.6 hedge funds with bullish positions and the average amount invested in these stocks was $266 million. That figure was $506 million in WK’s case. Pure Storage, Inc. (NYSE:PSTG) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Sureste (NYSE:ASR) is the least popular one with only 5 bullish hedge fund positions. Workiva Inc (NYSE:WK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WK is 63.4. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on WK as the stock returned 34.4% since the end of Q2 (through 10/22) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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

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