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Was The Smart Money Right About Autodesk, Inc. (ADSK)?

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·5 min read
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The Insider Monkey team has completed processing the quarterly 13F filings for the December quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Autodesk, Inc. (NASDAQ:ADSK).

Is Autodesk, Inc. (NASDAQ:ADSK) going to take off soon? The smart money was in a bullish mood. The number of bullish hedge fund bets increased by 1 in recent months. Autodesk, Inc. (NASDAQ:ADSK) was in 66 hedge funds' portfolios at the end of December. The all time high for this statistic is 67. Our calculations also showed that ADSK isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).

William Von Mueffling - Cantillon Capital Management
William Von Mueffling - Cantillon Capital Management

William Von Mueffling of Cantillon Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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 website. Now let's review the key hedge fund action surrounding Autodesk, Inc. (NASDAQ:ADSK).

Do Hedge Funds Think ADSK Is A Good Stock To Buy Now?

At fourth quarter's end, a total of 66 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from the third quarter of 2020. On the other hand, there were a total of 64 hedge funds with a bullish position in ADSK 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.

More specifically, Lone Pine Capital was the largest shareholder of Autodesk, Inc. (NASDAQ:ADSK), with a stake worth $675.6 million reported as of the end of December. Trailing Lone Pine Capital was Cantillon Capital Management, which amassed a stake valued at $390.7 million. Impax Asset Management, Alkeon Capital Management, and Fisher Asset 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 Marlowe Partners allocated the biggest weight to Autodesk, Inc. (NASDAQ:ADSK), around 17.41% of its 13F portfolio. Blue Whale Capital is also relatively very bullish on the stock, dishing out 8.83 percent of its 13F equity portfolio to ADSK.

As industrywide interest jumped, key hedge funds have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, created the most outsized position in Autodesk, Inc. (NASDAQ:ADSK). Balyasny Asset Management had $65.4 million invested in the company at the end of the quarter. Alok Agrawal's Bloom Tree Partners also made a $44 million investment in the stock during the quarter. The other funds with brand new ADSK positions are Josh Resnick's Jericho Capital Asset Management, Steve Cohen's Point72 Asset Management, and John Smith Clark's Southpoint Capital Advisors.

Let's now take a look at hedge fund activity in other stocks similar to Autodesk, Inc. (NASDAQ:ADSK). These stocks are The Sherwin-Williams Company (NYSE:SHW), The Bank of Nova Scotia (NYSE:BNS), CME Group Inc (NASDAQ:CME), NetEase, Inc (NASDAQ:NTES), The Southern Company (NYSE:SO), Enbridge Inc (NYSE:ENB), and Intercontinental Exchange Inc (NYSE:ICE). All of these stocks' market caps are similar to ADSK's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SHW,49,1881345,-6 BNS,19,336708,5 CME,58,2275518,-1 NTES,38,3467820,-7 SO,32,400160,7 ENB,28,181170,3 ICE,53,3273294,-11 Average,39.6,1688002,-1.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 39.6 hedge funds with bullish positions and the average amount invested in these stocks was $1688 million. That figure was $3528 million in ADSK's case. CME Group Inc (NASDAQ:CME) is the most popular stock in this table. On the other hand The Bank of Nova Scotia (NYSE:BNS) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Autodesk, Inc. (NASDAQ:ADSK) is more popular among hedge funds. Our overall hedge fund sentiment score for ADSK is 85.6. 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 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 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Unfortunately ADSK wasn't nearly as popular as these 30 stocks and hedge funds that were betting on ADSK were disappointed as the stock returned -5% since the end of the fourth quarter (through 4/19) 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 most of these stocks already outperformed the market since 2019.

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

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