The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Akamai Technologies, Inc. (NASDAQ:AKAM).
Akamai Technologies, Inc. (NASDAQ:AKAM) investors should pay attention to a decrease in enthusiasm from smart money of late. AKAM was in 28 hedge funds' portfolios at the end of the first quarter of 2019. There were 34 hedge funds in our database with AKAM positions at the end of the previous quarter. Our calculations also showed that akam isn't among the 30 most popular stocks among hedge funds.
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' 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.
[caption id="attachment_745225" align="aligncenter" width="473"] Noam Gottesman, GLG Partners[/caption]
We're going to take a peek at the recent hedge fund action regarding Akamai Technologies, Inc. (NASDAQ:AKAM).
What does the smart money think about Akamai Technologies, Inc. (NASDAQ:AKAM)?
Heading into the second quarter of 2019, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -18% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AKAM over the last 15 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
The largest stake in Akamai Technologies, Inc. (NASDAQ:AKAM) was held by AQR Capital Management, which reported holding $314 million worth of stock at the end of March. It was followed by GLG Partners with a $59.7 million position. Other investors bullish on the company included D E Shaw, Renaissance Technologies, and Millennium Management.
Because Akamai Technologies, Inc. (NASDAQ:AKAM) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few hedge funds that decided to sell off their positions entirely in the third quarter. Interestingly, Paul Singer's Elliott Management cut the largest position of all the hedgies monitored by Insider Monkey, worth an estimated $145.6 million in stock, and Howard Marks's Oaktree Capital Management was right behind this move, as the fund said goodbye to about $68.7 million worth. These transactions are important to note, as total hedge fund interest was cut by 6 funds in the third quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Akamai Technologies, Inc. (NASDAQ:AKAM) but similarly valued. These stocks are Molson Coors Brewing Company (NYSE:TAP), Brookfield Infrastructure Partners L.P. (NYSE:BIP), Comerica Incorporated (NYSE:CMA), and Masco Corporation (NYSE:MAS). This group of stocks' market valuations are closest to AKAM's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TAP,27,317583,-1 BIP,7,28125,-1 CMA,36,579378,0 MAS,40,1105245,6 Average,27.5,507583,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.5 hedge funds with bullish positions and the average amount invested in these stocks was $508 million. That figure was $764 million in AKAM's case. Masco Corporation (NYSE:MAS) is the most popular stock in this table. On the other hand Brookfield Infrastructure Partners L.P. (NYSE:BIP) is the least popular one with only 7 bullish hedge fund positions. Akamai Technologies, Inc. (NASDAQ:AKAM) is not the most popular stock in this group but hedge fund interest is still above 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. Hedge funds were also right about betting on AKAM as the stock returned 7.1% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.