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The Insider Monkey team has completed processing the quarterly 13F filings for the September 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 Veeva Systems Inc (NYSE:VEEV).
Veeva Systems Inc (NYSE:VEEV) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 44 hedge funds' portfolios at the end of the third quarter of 2021. Our calculations also showed that VEEV isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA), Datadog, Inc. (NASDAQ:DDOG), and Amphenol Corporation (NYSE:APH) to gather more data points.
Joel Greenblatt of Gotham Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind let's take a glance at the recent hedge fund action regarding Veeva Systems Inc (NYSE:VEEV).
Do Hedge Funds Think VEEV Is A Good Stock To Buy Now?
At third quarter's end, a total of 44 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2021. By comparison, 38 hedge funds held shares or bullish call options in VEEV a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the biggest position in Veeva Systems Inc (NYSE:VEEV). Arrowstreet Capital has a $282.8 million position in the stock, comprising 0.4% of its 13F portfolio. The second largest stake is held by ARK Investment Management, managed by Catherine D. Wood, which holds a $212.1 million position; 0.5% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that are bullish comprise Noam Gottesman's GLG Partners, Greg Poole's Echo Street Capital Management and Anand Parekh's Alyeska Investment Group. In terms of the portfolio weights assigned to each position Blue Whale Capital allocated the biggest weight to Veeva Systems Inc (NYSE:VEEV), around 5.74% of its 13F portfolio. 1623 Capital is also relatively very bullish on the stock, dishing out 3.88 percent of its 13F equity portfolio to VEEV.
Since Veeva Systems Inc (NYSE:VEEV) has witnessed declining sentiment from the smart money, it's easy to see that there was a specific group of fund managers who sold off their full holdings heading into Q4. Interestingly, Brandon Haley's Holocene Advisors sold off the largest investment of the 750 funds followed by Insider Monkey, comprising about $86.8 million in stock, and Arthur B Cohen and Joseph Healey's Healthcor Management LP was right behind this move, as the fund cut about $42.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Veeva Systems Inc (NYSE:VEEV) but similarly valued. We will take a look at Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA), Datadog, Inc. (NASDAQ:DDOG), Amphenol Corporation (NYSE:APH), Lloyds Banking Group PLC (NYSE:LYG), Barclays PLC (NYSE:BCS), Match Group, Inc. (NASDAQ:MTCH), and Roblox Corporation (NYSE:RBLX). This group of stocks' market caps are closest to VEEV's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BBVA,10,310429,1 DDOG,62,4934612,6 APH,26,897948,-13 LYG,8,16143,0 BCS,12,105770,1 MTCH,56,2662829,-7 RBLX,50,3575923,1 Average,32,1786236,-1.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $1786 million. That figure was $1632 million in VEEV's case. Datadog, Inc. (NASDAQ:DDOG) is the most popular stock in this table. On the other hand Lloyds Banking Group PLC (NYSE:LYG) is the least popular one with only 8 bullish hedge fund positions. Veeva Systems Inc (NYSE:VEEV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VEEV is 68.3. 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 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately VEEV wasn't nearly as popular as these 5 stocks and hedge funds that were betting on VEEV were disappointed as the stock returned -1.9% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 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.