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 have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31 holdings, data that is available nowhere else. Should you consider BlackLine, Inc. (NASDAQ:BL) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
BlackLine, Inc. (NASDAQ:BL) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 13 hedge funds' portfolios at the end of December. At the end of this article we will also compare BL to other stocks including Fox Factory Holding Corp (NASDAQ:FOXF), Simmons First National Corporation (NASDAQ:SFNC), and Apollo Commercial Real Est. Finance Inc (NYSE:ARI) to get a better sense of its popularity.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to take a peek at the fresh hedge fund action regarding BlackLine, Inc. (NASDAQ:BL).
Hedge fund activity in BlackLine, Inc. (NASDAQ:BL)
Heading into the first quarter of 2019, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 20 hedge funds with a bullish position in BL a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in BlackLine, Inc. (NASDAQ:BL) was held by Silver Lake Partners, which reported holding $163.1 million worth of stock at the end of December. It was followed by D E Shaw with a $18.3 million position. Other investors bullish on the company included Segantii Capital, Renaissance Technologies, and Islet Management.
Judging by the fact that BlackLine, Inc. (NASDAQ:BL) has faced falling interest from the smart money, logic holds that there was a specific group of fund managers who were dropping their full holdings heading into Q3. Interestingly, Spencer M. Waxman's Shannon River Fund Management cut the biggest stake of the "upper crust" of funds followed by Insider Monkey, totaling an estimated $5.5 million in stock. Philip Hempleman's fund, Ardsley Partners, also cut its stock, about $5.4 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as BlackLine, Inc. (NASDAQ:BL) but similarly valued. We will take a look at Fox Factory Holding Corp (NASDAQ:FOXF), Simmons First National Corporation (NASDAQ:SFNC), Apollo Commercial Real Est. Finance Inc (NYSE:ARI), and 360 Finance, Inc. (NASDAQ:QFIN). This group of stocks' market caps are similar to BL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FOXF,11,47318,1 SFNC,7,12428,-2 ARI,10,34816,3 QFIN,2,1897,2 Average,7.5,24115,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $207 million in BL's case. Fox Factory Holding Corp (NASDAQ:FOXF) is the most popular stock in this table. On the other hand 360 Finance, Inc. (NASDAQ:QFIN) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks BlackLine, Inc. (NASDAQ:BL) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately BL wasn't nearly as popular as these 15 stock and hedge funds that were betting on BL were disappointed as the stock returned 15.6% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.