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Where Do Hedge Funds Stand On HubSpot Inc (HUBS)?

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Is HubSpot Inc (NYSE:HUBS) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Is HubSpot Inc (NYSE:HUBS) a healthy stock for your portfolio? The best stock pickers were becoming less confident. The number of long hedge fund bets were cut by 6 lately. HubSpot Inc (NYSE:HUBS) was in 46 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 52. Our calculations also showed that HUBS isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

To the average investor there are a multitude of indicators shareholders have at their disposal to assess their stock investments. Two of the most innovative indicators are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can beat their index-focused peers by a very impressive margin (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Tim Woolley of Polar Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation, which is why we are checking out this inflation play. We go through lists like 10 best gold stocks to buy to identify promising stocks. 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 let's check out the new hedge fund action surrounding HubSpot Inc (NYSE:HUBS).

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

At Q1's end, a total of 46 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -12% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in HUBS over the last 23 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, SCGE Management held the most valuable stake in HubSpot Inc (NYSE:HUBS), which was worth $639.5 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $193.4 million worth of shares. Polar Capital, SQN Investors, and Hitchwood Capital 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 SCGE Management allocated the biggest weight to HubSpot Inc (NYSE:HUBS), around 7.18% of its 13F portfolio. SQN Investors is also relatively very bullish on the stock, earmarking 4.86 percent of its 13F equity portfolio to HUBS.

Since HubSpot Inc (NYSE:HUBS) has experienced bearish sentiment from hedge fund managers, we can see that there lies a certain "tier" of funds who were dropping their full holdings last quarter. It's worth mentioning that Ken Griffin's Citadel Investment Group cut the biggest investment of the 750 funds monitored by Insider Monkey, valued at an estimated $123.9 million in stock. Michael Kahan and Jeremy Kahan's fund, North Peak Capital, also dropped its stock, about $60.7 million worth. These moves are important to note, as total hedge fund interest was cut by 6 funds last quarter.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as HubSpot Inc (NYSE:HUBS) but similarly valued. These stocks are Fox Corporation (NASDAQ:FOX), Fox Corporation (NASDAQ:FOXA), W.W. Grainger, Inc. (NYSE:GWW), Enphase Energy Inc (NASDAQ:ENPH), Martin Marietta Materials, Inc. (NYSE:MLM), West Pharmaceutical Services Inc. (NYSE:WST), and Lyft, Inc. (NASDAQ:LYFT). This group of stocks' market values are closest to HUBS's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FOX,25,774862,8 FOXA,38,865348,-1 GWW,30,351308,0 ENPH,49,803938,1 MLM,41,1951007,0 WST,26,419487,-8 LYFT,60,1954603,8 Average,38.4,1017222,1.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 38.4 hedge funds with bullish positions and the average amount invested in these stocks was $1017 million. That figure was $1739 million in HUBS's case. Lyft, Inc. (NASDAQ:LYFT) is the most popular stock in this table. On the other hand Fox Corporation (NASDAQ:FOX) is the least popular one with only 25 bullish hedge fund positions. HubSpot Inc (NYSE:HUBS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HUBS is 55.5. 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 gained 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. Hedge funds were also right about betting on HUBS as the stock returned 30.7% since the end of Q1 (through 6/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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