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Hedge Funds Have Never Been This Bullish On Atlassian Corporation Plc (TEAM)

Reymerlyn Martin

With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the first quarter. One of these stocks was Atlassian Corporation Plc (NASDAQ:TEAM).

Atlassian Corporation Plc (NASDAQ:TEAM) investors should be aware of an increase in support from the world's most elite money managers lately. TEAM was in 36 hedge funds' portfolios at the end of March. There were 34 hedge funds in our database with TEAM holdings at the end of the previous quarter. Our calculations also showed that TEAM isn't among the 30 most popular stocks among hedge funds.

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 40 percentage points since May 2014 through May 30, 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 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Stan Druckenmiller DUQUESNE CAPITAL

Let's take a gander at the key hedge fund action encompassing Atlassian Corporation Plc (NASDAQ:TEAM).

How are hedge funds trading Atlassian Corporation Plc (NASDAQ:TEAM)?

At the end of the first quarter, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. On the other hand, there were a total of 25 hedge funds with a bullish position in TEAM a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

TEAM_jun2019

More specifically, Renaissance Technologies was the largest shareholder of Atlassian Corporation Plc (NASDAQ:TEAM), with a stake worth $432.9 million reported as of the end of March. Trailing Renaissance Technologies was Tybourne Capital Management, which amassed a stake valued at $266.2 million. D E Shaw, Arrowstreet Capital, and Point State Capital were also very fond of the stock, giving the stock large weights in their portfolios.

As one would reasonably expect, key hedge funds were breaking ground themselves. Point State Capital, managed by Zach Schreiber, assembled the most valuable position in Atlassian Corporation Plc (NASDAQ:TEAM). Point State Capital had $117.7 million invested in the company at the end of the quarter. Brandon Haley's Holocene Advisors also made a $57.8 million investment in the stock during the quarter. The other funds with brand new TEAM positions are Ben Gambill's Tiger Eye Capital, Stanley Druckenmiller's Duquesne Capital, and Michael Gelband's ExodusPoint Capital.

Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Atlassian Corporation Plc (NASDAQ:TEAM) but similarly valued. These stocks are Sirius XM Holdings Inc (NASDAQ:SIRI), PPG Industries, Inc. (NYSE:PPG), Lyft, Inc. (NASDAQ:LYFT), and SunTrust Banks, Inc. (NYSE:STI). This group of stocks' market valuations are similar to TEAM's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SIRI,32,1585774,11 PPG,23,926417,4 LYFT,71,2154307,71 STI,22,592065,-12 Average,37,1314641,18.5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 37 hedge funds with bullish positions and the average amount invested in these stocks was $1315 million. That figure was $1619 million in TEAM's case. Lyft, Inc. (NASDAQ:LYFT) is the most popular stock in this table. On the other hand SunTrust Banks, Inc. (NYSE:STI) is the least popular one with only 22 bullish hedge fund positions. Atlassian Corporation Plc (NASDAQ:TEAM) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on TEAM as the stock returned 12.3% during the same time frame and outperformed the market by an even larger margin.

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

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