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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider CrowdStrike Holdings, Inc. (NASDAQ:CRWD) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is CrowdStrike Holdings, Inc. (NASDAQ:CRWD) a sound stock to buy now? Prominent investors were in a pessimistic mood. The number of long hedge fund bets were cut by 15 recently. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) was in 77 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 92. Our calculations also showed that CRWD isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 92 hedge funds in our database with CRWD positions at the end of the fourth quarter.
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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Philippe Laffont of Coatue Management
At Insider Monkey we leave no stone unturned when looking for 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 hydrogen fuel cell 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. With all of this in mind we're going to review the fresh hedge fund action regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD).
Do Hedge Funds Think CRWD Is A Good Stock To Buy Now?
At first quarter's end, a total of 77 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -16% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CRWD over the last 23 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Chase Coleman's Tiger Global Management LLC has the biggest position in CrowdStrike Holdings, Inc. (NASDAQ:CRWD), worth close to $1.3756 billion, comprising 3.2% of its total 13F portfolio. The second largest stake is held by Matrix Capital Management, led by David Goel and Paul Ferri, holding a $547.5 million position; the fund has 6.3% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish consist of Alex Sacerdote's Whale Rock Capital Management, Philippe Laffont's Coatue Management and D. E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position Isomer Partners allocated the biggest weight to CrowdStrike Holdings, Inc. (NASDAQ:CRWD), around 11.41% of its 13F portfolio. Matrix Capital Management is also relatively very bullish on the stock, setting aside 6.32 percent of its 13F equity portfolio to CRWD.
Seeing as CrowdStrike Holdings, Inc. (NASDAQ:CRWD) has faced a decline in interest from the entirety of the hedge funds we track, it's easy to see that there is a sect of fund managers that decided to sell off their positions entirely heading into Q2. Intriguingly, Brandon Haley's Holocene Advisors said goodbye to the largest position of the "upper crust" of funds followed by Insider Monkey, valued at about $129.3 million in stock. Glen Kacher's fund, Light Street Capital, also dropped its stock, about $80.5 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 15 funds heading into Q2.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as CrowdStrike Holdings, Inc. (NASDAQ:CRWD) but similarly valued. We will take a look at BCE Inc. (NYSE:BCE), Parker-Hannifin Corporation (NYSE:PH), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), Bilibili Inc. (NASDAQ:BILI), SYSCO Corporation (NYSE:SYY), Sempra Energy (NYSE:SRE), and Chipotle Mexican Grill, Inc. (NYSE:CMG). This group of stocks' market caps match CRWD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BCE,10,121896,-3 PH,43,1259967,-13 ERIC,19,317626,-1 BILI,53,3015445,7 SYY,42,2719253,2 SRE,27,596834,-6 CMG,41,3037666,6 Average,33.6,1581241,-1.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.6 hedge funds with bullish positions and the average amount invested in these stocks was $1581 million. That figure was $5258 million in CRWD's case. Bilibili Inc. (NASDAQ:BILI) is the most popular stock in this table. On the other hand BCE Inc. (NYSE:BCE) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is more popular among hedge funds. Our overall hedge fund sentiment score for CRWD is 65.1. 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 returned 17.2% in 2021 through June 11th but still managed to beat the market by 3.3 percentage points. Hedge funds were also right about betting on CRWD as the stock returned 26.7% since the end of March (through 6/11) 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.
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Disclosure: None. This article was originally published at Insider Monkey.