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Hedge Funds Are Buying Hortonworks Inc (HDP)

Nina Todic

Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds' portfolio positions as of September 30th. What do these smart investors think about Hortonworks Inc (NASDAQ:HDP)?

Hortonworks Inc (NASDAQ:HDP) investors should be aware of an increase in activity from the world's largest hedge funds lately. Our calculations also showed that hdp isn't among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Izzy Englander of MILLENNIUM MANAGEMENT

We're going to take a look at the latest hedge fund action surrounding Hortonworks Inc (NASDAQ:HDP).

What does the smart money think about Hortonworks Inc (NASDAQ:HDP)?

Heading into the fourth quarter of 2018, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the second quarter of 2018. By comparison, 20 hedge funds held shares or bullish call options in HDP heading into this year. With hedge funds' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

No of Hedge Funds with HDP Positions

The largest stake in Hortonworks Inc (NASDAQ:HDP) was held by Tremblant Capital, which reported holding $53.1 million worth of stock at the end of September. It was followed by Millennium Management with a $49.7 million position. Other investors bullish on the company included RGM Capital, Marshall Wace LLP, and Daruma Asset Management.

With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most outsized position in Hortonworks Inc (NASDAQ:HDP). Marshall Wace LLP had $40.2 million invested in the company at the end of the quarter. Bruce Garelick's Garelick Capital Partners also made a $20 million investment in the stock during the quarter. The other funds with brand new HDP positions are Eduardo Costa's Calixto Global Investors, John Osterweis's Osterweis Capital Management, and Frank Slattery's Symmetry Peak Management.

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Hortonworks Inc (NASDAQ:HDP) but similarly valued. We will take a look at Power Integrations Inc (NASDAQ:POWI), Berkshire Hills Bancorp, Inc. (NYSE:BHLB), Brookdale Senior Living, Inc. (NYSE:BKD), and Horace Mann Educators Corporation (NYSE:HMN). This group of stocks' market valuations are closest to HDP's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position POWI,9,97255,5 BHLB,8,38026,0 BKD,20,510063,-7 HMN,14,36254,2 Average,12.75,170400,0 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $170 million. That figure was $409 million in HDP's case. Brookdale Senior Living, Inc. (NYSE:BKD) is the most popular stock in this table. On the other hand Berkshire Hills Bancorp, Inc. (NYSE:BHLB) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Hortonworks Inc (NASDAQ:HDP) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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

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