Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Autodesk, Inc. (NASDAQ:ADSK) based on that data.
Autodesk, Inc. (NASDAQ:ADSK) was in 65 hedge funds' portfolios at the end of March. ADSK shareholders have witnessed an increase in enthusiasm from smart money recently. There were 64 hedge funds in our database with ADSK holdings at the end of the previous quarter. Our calculations also showed that ADSK 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). 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 has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 44 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
[caption id="attachment_364853" align="aligncenter" width="397"] William Von Mueffling of Cantillon Capital Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Europe is set to become the world’s largest cannabis market, so we checked out this European marijuana stock pitch. Also, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this analyst’s “corona catalyst plays“. 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 let's take a peek at the fresh hedge fund action encompassing Autodesk, Inc. (NASDAQ:ADSK).
What does smart money think about Autodesk, Inc. (NASDAQ:ADSK)?
At the end of the first quarter, a total of 65 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ADSK over the last 18 quarters. With the smart money's sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
Among these funds, Lone Pine Capital held the most valuable stake in Autodesk, Inc. (NASDAQ:ADSK), which was worth $628.1 million at the end of the third quarter. On the second spot was Cantillon Capital Management which amassed $200.9 million worth of shares. D E Shaw, Two Sigma Advisors, and Darsana Capital Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Marlowe Partners allocated the biggest weight to Autodesk, Inc. (NASDAQ:ADSK), around 12.76% of its 13F portfolio. Blue Whale Capital is also relatively very bullish on the stock, designating 10.39 percent of its 13F equity portfolio to ADSK.
Consequently, key hedge funds have been driving this bullishness. Governors Lane, managed by Isaac Corre, initiated the most outsized position in Autodesk, Inc. (NASDAQ:ADSK). Governors Lane had $21.7 million invested in the company at the end of the quarter. Greg Eisner's Engineers Gate Manager also made a $5.8 million investment in the stock during the quarter. The other funds with brand new ADSK positions are Joseph Samuels's Islet Management, Paul Tudor Jones's Tudor Investment Corp, and Richard SchimeláandáLawrence Sapanski's Cinctive Capital Management.
Let's go over hedge fund activity in other stocks similar to Autodesk, Inc. (NASDAQ:ADSK). These stocks are Keurig Dr Pepper Inc. (NYSE:KDP), Atlassian Corporation Plc (NASDAQ:TEAM), Thomson Reuters Corporation (NYSE:TRI), and UBS Group AG (NYSE:UBS). This group of stocks' market values resemble ADSK's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KDP,30,564764,4 TEAM,59,2586287,-3 TRI,22,330343,1 UBS,15,211262,1 Average,31.5,923164,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.5 hedge funds with bullish positions and the average amount invested in these stocks was $923 million. That figure was $2598 million in ADSK's case. Atlassian Corporation Plc (NASDAQ:TEAM) is the most popular stock in this table. On the other hand UBS Group AG (NYSE:UBS) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Autodesk, Inc. (NASDAQ:ADSK) is more popular among hedge funds. 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 returned 7.9% in 2020 through May 22nd but still managed to beat the market by 15.6 percentage points. Hedge funds were also right about betting on ADSK as the stock returned 25.4% so far in Q2 (through May 22nd) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.