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Hedge Funds Are Cashing Out Of Everbridge, Inc. (EVBG) In Droves

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At Insider Monkey, we pore over the filings of nearly 873 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of June 30th. In this article, we will use that wealth of knowledge to determine whether or not Everbridge, Inc. (NASDAQ:EVBG) makes for a good investment right now.

Everbridge, Inc. (NASDAQ:EVBG) has seen a decrease in enthusiasm from smart money lately. Everbridge, Inc. (NASDAQ:EVBG) was in 26 hedge funds' portfolios at the end of June. The all time high for this statistic is 49. There were 49 hedge funds in our database with EVBG positions at the end of the first quarter. Our calculations also showed that EVBG isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Today there are a multitude of indicators shareholders use to analyze publicly traded companies. A pair of the most under-the-radar indicators are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the top investment managers can trounce the market by a solid margin (see the details here). 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.

Sahm Adrangi Kerrisdale Capital
Sahm Adrangi Kerrisdale Capital

Sahm Adrangi of Kerrisdale Capital

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. Now let's take a gander at the recent hedge fund action surrounding Everbridge, Inc. (NASDAQ:EVBG).

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

At the end of June, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -47% from the first quarter of 2020. By comparison, 43 hedge funds held shares or bullish call options in EVBG 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.

When looking at the institutional investors followed by Insider Monkey, Robert Joseph Caruso's Select Equity Group has the largest position in Everbridge, Inc. (NASDAQ:EVBG), worth close to $496.6 million, corresponding to 1.7% of its total 13F portfolio. The second largest stake is held by Sylebra Capital Management, managed by Daniel Patrick Gibson, which holds a $243.2 million position; the fund has 6% of its 13F portfolio invested in the stock. Some other peers that are bullish comprise Brian Ashford-Russell and Tim Woolley's Polar Capital, Richard Scott Greeder's Broad Bay Capital and Bryan Hinmon's Motley Fool Asset Management. In terms of the portfolio weights assigned to each position Calixto Global Investors allocated the biggest weight to Everbridge, Inc. (NASDAQ:EVBG), around 10.88% of its 13F portfolio. Sylebra Capital Management is also relatively very bullish on the stock, setting aside 6.03 percent of its 13F equity portfolio to EVBG.

Due to the fact that Everbridge, Inc. (NASDAQ:EVBG) has faced declining sentiment from hedge fund managers, it's easy to see that there were a few hedgies that elected to cut their entire stakes last quarter. Interestingly, Seth Wunder's Black-and-White Capital cut the biggest investment of the "upper crust" of funds monitored by Insider Monkey, worth about $21.1 million in stock, and Joseph Samuels's Islet Management was right behind this move, as the fund sold off about $16.4 million worth. These moves are important to note, as total hedge fund interest was cut by 23 funds last quarter.

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Everbridge, Inc. (NASDAQ:EVBG) but similarly valued. These stocks are The Wendy's Company (NASDAQ:WEN), Altair Engineering Inc. (NASDAQ:ALTR), Alliance Data Systems Corporation (NYSE:ADS), Cyberark Software Ltd (NASDAQ:CYBR), Driven Brands Holdings Inc. (NASDAQ:DRVN), ZIM Integrated Shipping Services Ltd. (NYSE:ZIM), and ChampionX Corporation (NASDAQ:CHX). This group of stocks' market caps are similar to EVBG's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WEN,30,1070385,4 ALTR,18,620134,0 ADS,34,1338720,-2 CYBR,27,502082,-5 DRVN,19,91484,1 ZIM,25,327039,11 CHX,30,525472,2 Average,26.1,639331,1.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.1 hedge funds with bullish positions and the average amount invested in these stocks was $639 million. That figure was $1200 million in EVBG's case. Alliance Data Systems Corporation (NYSE:ADS) is the most popular stock in this table. On the other hand Altair Engineering Inc. (NASDAQ:ALTR) is the least popular one with only 18 bullish hedge fund positions. Everbridge, Inc. (NASDAQ:EVBG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EVBG is 22.9. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. A small number of hedge funds were also right about betting on EVBG as the stock returned 8.4% since the end of the second quarter (through 10/15) and outperformed the market by an even larger margin.

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