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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 at Insider Monkey have plowed through 887 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of December 31st. In this article we look at what those investors think of Palo Alto Networks Inc (NYSE:PANW).
Is PANW stock a buy or sell? Palo Alto Networks Inc (NYSE:PANW) investors should pay attention to an increase in support from the world's most elite money managers lately. Palo Alto Networks Inc (NYSE:PANW) was in 61 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 59. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PANW isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
David Blood of Generation Investment 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 (or at the end of this article). Keeping this in mind we're going to take a gander at the fresh hedge fund action encompassing Palo Alto Networks Inc (NYSE:PANW).
Do Hedge Funds Think PANW Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 61 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3% from the previous quarter. By comparison, 47 hedge funds held shares or bullish call options in PANW a year ago. 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, Renaissance Technologies was the largest shareholder of Palo Alto Networks Inc (NYSE:PANW), with a stake worth $1084.9 million reported as of the end of December. Trailing Renaissance Technologies was Generation Investment Management, which amassed a stake valued at $963.5 million. Viking Global, Cadian Capital, and Citadel Investment Group 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 Isomer Partners allocated the biggest weight to Palo Alto Networks Inc (NYSE:PANW), around 11.05% of its 13F portfolio. Crosslink Capital is also relatively very bullish on the stock, earmarking 9.84 percent of its 13F equity portfolio to PANW.
Consequently, some big names were breaking ground themselves. Viking Global, managed by Andreas Halvorsen, assembled the largest position in Palo Alto Networks Inc (NYSE:PANW). Viking Global had $670.7 million invested in the company at the end of the quarter. Brandon Haley's Holocene Advisors also initiated a $147.9 million position during the quarter. The other funds with brand new PANW positions are John Hurley's Cavalry Asset Management, Ben Jacobs's Anomaly Capital Management, and Parvinder Thiara's Athanor Capital.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Palo Alto Networks Inc (NYSE:PANW) but similarly valued. We will take a look at IQVIA Holdings, Inc. (NYSE:IQV), T. Rowe Price Group, Inc. (NASDAQ:TROW), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), PPG Industries, Inc. (NYSE:PPG), RingCentral Inc (NYSE:RNG), Verisk Analytics, Inc. (NASDAQ:VRSK), and Johnson Controls International plc (NYSE:JCI). This group of stocks' market values resemble PANW's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IQV,69,3764572,5 TROW,35,360876,1 ALXN,77,6025546,19 PPG,34,295422,-2 RNG,63,4401111,4 VRSK,32,1438418,-8 JCI,34,795050,10 Average,49.1,2440142,4.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 49.1 hedge funds with bullish positions and the average amount invested in these stocks was $2440 million. That figure was $4935 million in PANW's case. Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) is the most popular stock in this table. On the other hand Verisk Analytics, Inc. (NASDAQ:VRSK) is the least popular one with only 32 bullish hedge fund positions. Palo Alto Networks Inc (NYSE:PANW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PANW is 69.2. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately PANW wasn't nearly as popular as these 30 stocks and hedge funds that were betting on PANW were disappointed as the stock returned -10.8% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.