Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile gigantic failures like hedge funds’ recent losses in Valeant. Let’s take a closer look at what the funds we track think about Workday Inc (NYSE:WDAY) in this article.
Workday Inc was in 28 hedge funds’ portfolios at the end of September. WDAY shareholders have witnessed an increase in hedge fund interest recently. There were 26 hedge funds in our database with WDAY holdings at the end of the previous quarter. At the end of this article we will also compare WDAY to other stocks including Red Hat, Inc. (NYSE:RHT), Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH), and Loews Corporation (NYSE:L) to get a better sense of its popularity.
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With all of this in mind, we’re going to review the key action regarding Workday Inc (NYSE:WDAY).
How are hedge funds trading Workday Inc (NYSE:WDAY)?
At the end of the third quarter, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, David Goel and Paul Ferri’s Matrix Capital Management has the biggest position in Workday Inc (NYSE:WDAY), worth close to $243.6 million, comprising 11.3% of its total 13F portfolio. The second most bullish fund manager is Criterion Capital, led by Christopher Lord, holding a $243.2 million position; the fund has 8.3% of its 13F portfolio invested in the stock. Some other peers that are bullish comprise John Griffin’s Blue Ridge Capital, Eashwar Krishnan’s Tybourne Capital Management and Christopher Lyle’s SCGE Management.
With a general bullishness amongst the heavyweights, some big names have jumped into Workday Inc (NYSE:WDAY) headfirst. Tybourne Capital Management, managed by Eashwar Krishnan, established the most valuable position in Workday Inc (NYSE:WDAY). Tybourne Capital Management had $91.8 million invested in the company at the end of the quarter. Jane Mendillo’s Harvard Management Co also made a $24.7 million investment in the stock during the quarter. The following funds were also among the new WDAY investors: Alex Sacerdote’s Whale Rock Capital Management, Scott Fine and Peter Richards’s Empire Capital Management, and Israel Englander’s Millennium Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Workday Inc (NYSE:WDAY) but similarly valued. We will take a look at Red Hat, Inc. (NYSE:RHT), Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH), Loews Corporation (NYSE:L), and Best Buy Co., Inc. (NYSE:BBY). This group of stocks’ market valuations are similar to WDAY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RHT | 41 | 554846 | 1 |
| NCLH | 38 | 745372 | 0 |
| L | 19 | 1010435 | -7 |
| BBY | 28 | 700302 | -6 |
As you can see these stocks had an average of 31.5 hedge funds with bullish positions and the average amount invested in these stocks was $753 million. That figure was $1,019 million in WDAY’s case. Red Hat, Inc. (NYSE:RHT) is the most popular stock in this table. On the other hand Loews Corporation (NYSE:L) is the least popular one with only 19 bullish hedge fund positions. Workday Inc (NYSE:WDAY) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard RHT might be a better candidate to consider a long position.
