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8×8, Inc. (EGHT): Hedge Funds Are Taking Some Chips Off The Table

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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article we look at what those investors think of 8x8, Inc. (NYSE:EGHT).

8x8, Inc. (NYSE:EGHT) investors should pay attention to a decrease in support from the world's most elite money managers of late. 8x8, Inc. (NYSE:EGHT) was in 27 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 29. Our calculations also showed that EGHT isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Keeping this in mind let's take a look at the fresh hedge fund action encompassing 8x8, Inc. (NYSE:EGHT).

Ryan Frick Dorsal Capital
Ryan Frick Dorsal Capital

Ryan Frick of Dorsal Capital

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

Heading into the fourth quarter of 2021, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards EGHT over the last 25 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Sylebra Capital Management held the most valuable stake in 8x8, Inc. (NYSE:EGHT), which was worth $318.3 million at the end of the third quarter. On the second spot was Tiger Global Management LLC which amassed $210.5 million worth of shares. King Street Capital, Archon Capital Management, and Dorsal Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Sylebra Capital Management allocated the biggest weight to 8x8, Inc. (NYSE:EGHT), around 7.17% of its 13F portfolio. Stamina Capital Management is also relatively very bullish on the stock, dishing out 6.81 percent of its 13F equity portfolio to EGHT.

Seeing as 8x8, Inc. (NYSE:EGHT) has faced falling interest from the entirety of the hedge funds we track, logic holds that there were a few hedgies that decided to sell off their positions entirely last quarter. It's worth mentioning that David Atterbury's Whetstone Capital Advisors said goodbye to the biggest stake of the "upper crust" of funds followed by Insider Monkey, valued at about $5.5 million in stock. Richard SchimeláandáLawrence Sapanski's fund, Cinctive Capital Management, also cut its stock, about $3.3 million worth. These moves are important to note, as total hedge fund interest fell by 2 funds last quarter.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as 8x8, Inc. (NYSE:EGHT) but similarly valued. These stocks are Sinopec Shanghai Company Limited (NYSE:SHI), The Duckhorn Portfolio, Inc. (NYSE:NAPA), Hippo Holdings Inc. (NYSE:HIPO), Valaris Limited (NYSE:VAL), Sunstone Hotel Investors Inc (NYSE:SHO), Belden Inc. (NYSE:BDC), and SAGE Therapeutics Inc (NASDAQ:SAGE). This group of stocks' market caps match EGHT's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SHI,3,13756,-2 NAPA,8,158134,-8 HIPO,23,88135,23 VAL,26,1059546,-3 SHO,23,136845,5 BDC,17,172826,2 SAGE,22,234535,-5 Average,17.4,266254,1.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.4 hedge funds with bullish positions and the average amount invested in these stocks was $266 million. That figure was $787 million in EGHT's case. Valaris Limited (NYSE:VAL) is the most popular stock in this table. On the other hand Sinopec Shanghai Petrochemical Company Limited (NYSE:SHI) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks 8x8, Inc. (NYSE:EGHT) is more popular among hedge funds. Our overall hedge fund sentiment score for EGHT is 80.9. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Unfortunately EGHT wasn't nearly as popular as these 5 stocks and hedge funds that were betting on EGHT were disappointed as the stock returned -23.6% since the end of the third quarter (through 12/9) 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.

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