- Oops!Something went wrong.Please try again later.
- Oops!Something went wrong.Please try again later.
In this article you are going to find out whether hedge funds think Akamai Technologies, Inc. (NASDAQ:AKAM) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is AKAM a good stock to buy? Akamai Technologies, Inc. (NASDAQ:AKAM) was in 30 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 40. AKAM investors should pay attention to an increase in activity from the world's largest hedge funds in recent months. There were 25 hedge funds in our database with AKAM positions at the end of the first quarter. Our calculations also showed that AKAM isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the eyes of most stock holders, hedge funds are perceived as worthless, outdated investment tools of years past. While there are greater than 8000 funds trading at present, We look at the leaders of this group, approximately 850 funds. These hedge fund managers preside over most of the smart money's total capital, and by following their finest equity investments, Insider Monkey has deciphered numerous investment strategies that have historically outstripped Mr. Market. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Ian Wace of Marshall Wace
At Insider Monkey, we scour multiple sources to uncover 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 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. 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. Keeping this in mind let's review the latest hedge fund action regarding Akamai Technologies, Inc. (NASDAQ:AKAM).
Do Hedge Funds Think AKAM Is A Good Stock To Buy Now?
At second quarter's end, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from one quarter earlier. By comparison, 40 hedge funds held shares or bullish call options in AKAM a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Akamai Technologies, Inc. (NASDAQ:AKAM). Citadel Investment Group has a $84 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Citadel Investment Group, managed by Ken Griffin, which holds a $72.6 million call position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism comprise Paul Marshall and Ian Wace's Marshall Wace LLP, Cliff Asness's AQR Capital Management and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital. In terms of the portfolio weights assigned to each position L2 Asset Management allocated the biggest weight to Akamai Technologies, Inc. (NASDAQ:AKAM), around 1.3% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, designating 0.68 percent of its 13F equity portfolio to AKAM.
As one would reasonably expect, some big names were breaking ground themselves. Millennium Management, managed by Israel Englander, established the most valuable position in Akamai Technologies, Inc. (NASDAQ:AKAM). Millennium Management had $4.1 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors also made a $2.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Ray Dalio's Bridgewater Associates, D. E. Shaw's D E Shaw, and Jinghua Yan's TwinBeech Capital.
Let's check out hedge fund activity in other stocks similar to Akamai Technologies, Inc. (NASDAQ:AKAM). We will take a look at Ulta Beauty, Inc. (NASDAQ:ULTA), HEICO Corporation (NYSE:HEI), Insulet Corporation (NASDAQ:PODD), Cincinnati Financial Corporation (NASDAQ:CINF), Teleflex Incorporated (NYSE:TFX), Broadridge Financial Solutions, Inc. (NYSE:BR), and M&T Bank Corporation (NYSE:MTB). This group of stocks' market valuations match AKAM's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ULTA,40,1213090,-6 HEI,41,644494,-4 PODD,38,1447274,-1 CINF,22,780728,0 TFX,30,701718,-3 BR,27,315722,5 MTB,46,539380,10 Average,34.9,806058,0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.9 hedge funds with bullish positions and the average amount invested in these stocks was $806 million. That figure was $273 million in AKAM's case. M&T Bank Corporation (NYSE:MTB) is the most popular stock in this table. On the other hand Cincinnati Financial Corporation (NASDAQ:CINF) is the least popular one with only 22 bullish hedge fund positions. Akamai Technologies, Inc. (NASDAQ:AKAM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AKAM is 49.2. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 24.9% in 2021 through October 15th and surpassed the market again by 4.5 percentage points. Unfortunately AKAM wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); AKAM investors were disappointed as the stock returned -8.8% since the end of June (through 10/15) 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 in 2021.
Get real-time email alerts: Follow Akamai Technologies Inc (NASDAQ:AKAM)
Disclosure: None. This article was originally published at Insider Monkey.