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 823 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 June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded SVMK Inc. (NASDAQ:SVMK) and determine whether the smart money was really smart about this stock.
Is SVMK Inc. (NASDAQ:SVMK) a buy here? The smart money was turning bullish. The number of bullish hedge fund bets advanced by 4 lately. SVMK Inc. (NASDAQ:SVMK) was in 33 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 31. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SVMK isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 29 hedge funds in our database with SVMK positions at the end of the first quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are numerous metrics stock market investors have at their disposal to analyze their holdings. A couple of the best metrics are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the elite hedge fund managers can outperform the market by a very impressive margin (see the details here).
Joel Greenblatt of Gotham Asset Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. Cannabis stocks are roaring back in 2020, which is why we are also checking out this under-the-radar stock. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we're going to view the fresh hedge fund action encompassing SVMK Inc. (NASDAQ:SVMK).
What have hedge funds been doing with SVMK Inc. (NASDAQ:SVMK)?
At the end of June, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SVMK over the last 20 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Among these funds, Park West Asset Management held the most valuable stake in SVMK Inc. (NASDAQ:SVMK), which was worth $45.1 million at the end of the third quarter. On the second spot was Legion Partners Asset Management which amassed $36.3 million worth of shares. ThornTree Capital Partners, Royce & Associates, and D E Shaw 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 Legion Partners Asset Management allocated the biggest weight to SVMK Inc. (NASDAQ:SVMK), around 10.17% of its 13F portfolio. Akaris Global Partners is also relatively very bullish on the stock, setting aside 8.97 percent of its 13F equity portfolio to SVMK.
Now, key hedge funds have jumped into SVMK Inc. (NASDAQ:SVMK) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most outsized position in SVMK Inc. (NASDAQ:SVMK). Arrowstreet Capital had $19.7 million invested in the company at the end of the quarter. Zachary Miller's Parian Global Management also made a $10.3 million investment in the stock during the quarter. The following funds were also among the new SVMK investors: Warren Lammert's Granite Point Capital, Ken Fisher's Fisher Asset Management, and Joel Greenblatt's Gotham Asset Management.
Let's go over hedge fund activity in other stocks similar to SVMK Inc. (NASDAQ:SVMK). These stocks are Stifel Financial Corp. (NYSE:SF), Ormat Technologies, Inc. (NYSE:ORA), Kirby Corporation (NYSE:KEX), The Hain Celestial Group, Inc. (NASDAQ:HAIN), KBR, Inc. (NYSE:KBR), BRF SA (NYSE:BRFS), and Box, Inc. (NYSE:BOX). This group of stocks' market valuations are closest to SVMK's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SF,21,158221,4 ORA,19,179434,10 KEX,20,375194,-1 HAIN,24,829403,4 KBR,35,604967,7 BRFS,16,45626,2 BOX,33,655973,-1 Average,24,406974,3.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $407 million. That figure was $310 million in SVMK's case. KBR, Inc. (NYSE:KBR) is the most popular stock in this table. On the other hand BRF SA (NYSE:BRFS) is the least popular one with only 16 bullish hedge fund positions. SVMK Inc. (NASDAQ:SVMK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SVMK is 83.7. 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 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 33% in 2020 through the end of August and beat the market by 23.2 percentage points. Unfortunately SVMK wasn't nearly as popular as these 10 stocks and hedge funds that were betting on SVMK were disappointed as the stock returned 5.7% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.