Out of thousands of stocks that are currently traded on the market, it is difficult to determine those that can really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of over 700 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Fortinet Inc (NASDAQ:FTNT).
Fortinet Inc (NASDAQ:FTNT) was in 36 hedge funds’ portfolios at the end of September. FTNT shareholders have witnessed an increase in hedge fund sentiment in recent months. There were 26 hedge funds in our database with FTNT positions at the end of the previous quarter. 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 Restaurant Brands International Inc (NYSE:QSR), Sunoco Logistics Partners L.P. (NYSE:SXL), and The Cooper Companies, Inc. (NYSE:COO) to gather more data points.
Follow Fortinet Inc. (NASDAQ:FTNT)
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Now, we’re going to take a gander at the key action encompassing Fortinet Inc (NASDAQ:FTNT).
Hedge fund activity in Fortinet Inc (NASDAQ:FTNT)
Heading into Q4, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 38% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Ken Griffin’s Citadel Investment Group has the most valuable position in Fortinet Inc (NASDAQ:FTNT), worth close to $132.3 million, amounting to 0.1% of its total 13F portfolio. The second largest stake is held by Columbus Circle Investors which holds an $88.9 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism comprise Curtis Macnguyen’s Ivory Capital (Investment Mgmt), Israel Englander’s Millennium Management and Cliff Asness’ AQR Capital Management.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Ivory Capital (Investment Mgmt), managed by Curtis Macnguyen, created the most outsized position in Fortinet Inc (NASDAQ:FTNT). Ivory Capital (Investment Mgmt) had $24.8 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made an $19.7 million investment in the stock during the quarter. The other funds with brand new FTNT positions are Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Dmitry Balyasny’s Balyasny Asset Management, and Peter Muller’s PDT Partners.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Fortinet Inc (NASDAQ:FTNT) but similarly valued. These stocks are Restaurant Brands International Inc (NYSE:QSR), Sunoco Logistics Partners L.P. (NYSE:SXL), The Cooper Companies, Inc. (NYSE:COO), and VimpelCom Ltd (ADR) (NYSE:VIP). This group of stocks’ market caps match FTNT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| QSR | 29 | 2448593 | -8 |
| SXL | 9 | 67145 | -1 |
| COO | 29 | 532699 | 2 |
| VIP | 12 | 121847 | 0 |
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $793 million. That figure was $371 million in FTNT’s case. Restaurant Brands International Inc (NYSE:QSR) is the most popular stock in this table. On the other hand Sunoco Logistics Partners L.P. (NYSE:SXL) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Fortinet Inc (NASDAQ:FTNT) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
