Concerns over rising interest rates and expected further rate increases have hit several stocks hard during the fourth quarter of 2018. Trends reversed 180 degrees in 2019 amid Powell's pivot and optimistic expectations towards a trade deal with China. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were increasing their overall exposure in the third quarter and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Talend S.A. (NASDAQ:TLND).
Is Talend S.A. (NASDAQ:TLND) a superb investment right now? The smart money is betting on the stock. The number of bullish hedge fund bets moved up by 4 recently. Our calculations also showed that TLND isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). TLND was in 28 hedge funds' portfolios at the end of September. There were 24 hedge funds in our database with TLND holdings at the end of the previous quarter. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Today there are tons of formulas investors employ to grade their stock investments. A duo of the most useful formulas are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the best money managers can beat the broader indices by a very impressive amount (see the details here).
[caption id="attachment_690802" align="aligncenter" width="473"] Kevin Oram of Praesidium Investment Management[/caption]
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. Let's take a glance at the fresh hedge fund action surrounding Talend S.A. (NASDAQ:TLND).
How are hedge funds trading Talend S.A. (NASDAQ:TLND)?
At Q3's end, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in TLND over the last 17 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Praesidium Investment Management held the most valuable stake in Talend S.A. (NASDAQ:TLND), which was worth $60.9 million at the end of the third quarter. On the second spot was Park West Asset Management which amassed $47.9 million worth of shares. Southpoint Capital Advisors, Dorsal Capital Management, and Sunriver 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 Sheffield Asset Management allocated the biggest weight to Talend S.A. (NASDAQ:TLND), around 9.88% of its portfolio. Sunriver Management is also relatively very bullish on the stock, earmarking 6.93 percent of its 13F equity portfolio to TLND.
Consequently, specific money managers have been driving this bullishness. Light Street Capital, managed by Glen Kacher, assembled the biggest position in Talend S.A. (NASDAQ:TLND). Light Street Capital had $25.2 million invested in the company at the end of the quarter. Douglas Dossey and Arthur Young's Tensile Capital also initiated a $17.5 million position during the quarter. The other funds with brand new TLND positions are Zachary Miller's Parian Global Management, Mark N. Diker's Diker Management, and Charles Davidson and Joseph Jacobs's Wexford Capital.
Let's also examine hedge fund activity in other stocks similar to Talend S.A. (NASDAQ:TLND). We will take a look at Omega Flex, Inc. (NASDAQ:OFLX), Granite Point Mortgage Trust Inc. (NYSE:GPMT), Chase Corporation (NYSE:CCF), and The St. Joe Company (NYSE:JOE). This group of stocks' market caps match TLND's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OFLX,4,5556,1 GPMT,6,13231,-3 CCF,7,86633,-1 JOE,9,503471,-3 Average,6.5,152223,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $152 million. That figure was $421 million in TLND's case. The St. Joe Company (NYSE:JOE) is the most popular stock in this table. On the other hand Omega Flex, Inc. (NASDAQ:OFLX) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Talend S.A. (NASDAQ:TLND) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on TLND as the stock returned 11.7% during the first two months of Q4 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.
Disclosure: None. This article was originally published at Insider Monkey.