The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded BlackLine, Inc. (NASDAQ:BL) based on those filings.
Is BlackLine, Inc. (NASDAQ:BL) an attractive stock to buy now? The best stock pickers are getting more bullish. The number of long hedge fund positions went up by 1 lately. Our calculations also showed that BL 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). BL was in 18 hedge funds' portfolios at the end of March. There were 17 hedge funds in our database with BL positions at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
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 monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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 check out this European marijuana stock pitch. 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. Now we're going to take a gander at the new hedge fund action encompassing BlackLine, Inc. (NASDAQ:BL).
How are hedge funds trading BlackLine, Inc. (NASDAQ:BL)?
Heading into the second quarter of 2020, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BL over the last 18 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, D E Shaw was the largest shareholder of BlackLine, Inc. (NASDAQ:BL), with a stake worth $95.7 million reported as of the end of September. Trailing D E Shaw was Toronado Partners, which amassed a stake valued at $30.3 million. Two Sigma Advisors, Rivulet Capital, and Indaba Capital Management 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 Toronado Partners allocated the biggest weight to BlackLine, Inc. (NASDAQ:BL), around 9.47% of its 13F portfolio. Indaba Capital Management is also relatively very bullish on the stock, earmarking 3.24 percent of its 13F equity portfolio to BL.
Consequently, key hedge funds were breaking ground themselves. Rivulet Capital, managed by Barry Lebovits and Joshua Kuntz, assembled the biggest position in BlackLine, Inc. (NASDAQ:BL). Rivulet Capital had $6.4 million invested in the company at the end of the quarter. Derek C. Schrier's Indaba Capital Management also made a $6 million investment in the stock during the quarter. The other funds with brand new BL positions are Mark Coe's Intrinsic Edge Capital, George McCabe's Portolan Capital Management, and Greg Eisner's Engineers Gate Manager.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as BlackLine, Inc. (NASDAQ:BL) but similarly valued. These stocks are Texas Pacific Land Trust (NYSE:TPL), Wyndham Hotels & Resorts, Inc. (NYSE:WH), Valley National Bancorp (NYSE:VLY), and Perspecta Inc. (NYSE:PRSP). All of these stocks' market caps match BL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TPL,14,694383,-3 WH,31,501047,-13 VLY,22,24789,-2 PRSP,32,326939,-14 Average,24.75,386790,-8 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $387 million. That figure was $176 million in BL's case. Perspecta Inc. (NYSE:PRSP) is the most popular stock in this table. On the other hand Texas Pacific Land Trust (NYSE:TPL) is the least popular one with only 14 bullish hedge fund positions. BlackLine, Inc. (NASDAQ:BL) is not the least popular stock in this group but hedge fund interest is still below 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 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on BL as the stock returned 56.1% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.