We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of F5 Networks, Inc. (NASDAQ:FFIV) based on that data.
Is F5 Networks, Inc. (NASDAQ:FFIV) an excellent stock to buy now? The best stock pickers are taking an optimistic view. The number of bullish hedge fund bets advanced by 3 in recent months. Our calculations also showed that FFIV isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). FFIV was in 32 hedge funds' portfolios at the end of March. There were 29 hedge funds in our database with FFIV holdings at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 51 percentage points since March 2017 (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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_255014" align="aligncenter" width="394"] Clint Carlson of Carlson Capital[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to take a gander at the new hedge fund action regarding F5 Networks, Inc. (NASDAQ:FFIV).
What does smart money think about F5 Networks, Inc. (NASDAQ:FFIV)?
At Q1's end, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the fourth quarter of 2019. By comparison, 24 hedge funds held shares or bullish call options in FFIV 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 F5 Networks, Inc. (NASDAQ:FFIV) was held by Renaissance Technologies, which reported holding $289.9 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $214.9 million position. Other investors bullish on the company included AQR Capital Management, D E Shaw, and Alyeska Investment Group. In terms of the portfolio weights assigned to each position Alyeska Investment Group allocated the biggest weight to F5 Networks, Inc. (NASDAQ:FFIV), around 1.31% of its 13F portfolio. L2 Asset Management is also relatively very bullish on the stock, designating 1.12 percent of its 13F equity portfolio to FFIV.
With a general bullishness amongst the heavyweights, specific money managers have jumped into F5 Networks, Inc. (NASDAQ:FFIV) headfirst. Point72 Asset Management, managed by Steve Cohen, initiated the biggest position in F5 Networks, Inc. (NASDAQ:FFIV). Point72 Asset Management had $51.7 million invested in the company at the end of the quarter. Clint Carlson's Carlson Capital also initiated a $20.2 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace's Marshall Wace LLP, Greg Eisner's Engineers Gate Manager, and Mark Coe's Intrinsic Edge Capital.
Let's now take a look at hedge fund activity in other stocks similar to F5 Networks, Inc. (NASDAQ:FFIV). These stocks are Wynn Resorts, Limited (NASDAQ:WYNN), Advance Auto Parts, Inc. (NYSE:AAP), Aspen Technology, Inc. (NASDAQ:AZPN), and Regency Centers Corp (NASDAQ:REG). This group of stocks' market caps match FFIV's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WYNN,40,403164,-4 AAP,38,839686,-4 AZPN,20,736673,-17 REG,18,167065,2 Average,29,536647,-5.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $537 million. That figure was $940 million in FFIV's case. Wynn Resorts, Limited (NASDAQ:WYNN) is the most popular stock in this table. On the other hand Regency Centers Corp (NASDAQ:REG) is the least popular one with only 18 bullish hedge fund positions. F5 Networks, Inc. (NASDAQ:FFIV) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on FFIV as the stock returned 35.9% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.