Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Hedge Funds Have Long Bet on Cybersecurity and You Should Follow ASAP

Page 1 of 2

One of the larger companies that have gained ground on Thursday is Palo Alto Networks Inc (NYSE:PANW), whose stock has advanced by almost 8% on a trading volume of 2.94 million shares, versus average of 1.65 million shares. The reason behind the appreciation are very strong financial results for the fourth quarter of fiscal 2015, ended July 31. The company delivered a revenue growth of 59% on the year to $283.9 million and non-GAAP net income of $0.28 per share, versus $0.11 posted a year earlier. Analysts expected earnings of $0.25 per share and revenue of $270 million, and by beating them, Palo Alto had one of the strongest quarters in the last several years.

DLR Most Expensive Computers In the World

Carol Gauthier/

For the full year, Palo Alto Networks Inc (NYSE:PANW)’s revenue grew by 55% to $928.1 million and EPS surged to $0.86 from $0.40. The improvement of the results comes as governments and companies increased their spending on cybersecurity and the news had a positive impact across the whole industry. In this way, Fortinet Inc (NASDAQ:FTNT) appreciated by almost 3% today, while Juniper Networks, Inc. (NYSE:JNPR) gained 1.50%.

Aside from the fact that the overall market appreciated Palo Alto Networks Inc (NYSE:PANW)’s results, it’s important to point out that the company also has many fans among the smart money investors. The company is rather popular among the hedge fund we track, as we shall see later. But before we get to that, we need to explain the reasoning behind our interest in the hedge fund sentiment regarding a stock. Generally, most retail investors don’t pay attention to hedge funds’ moves, because of their lagging returns in the last couple of years. However, this performance is mostly affected by the hedge funds’ short positions in the bull market. On the other hand, some of their individual picks can generate returns significantly above those of the market. This is the case for hedge funds’ small-cap ideas, around which we have built our small-cap strategy. This strategy involves imitating 15 most popular small-cap stocks among some 730 funds and it has returned some 118% in the last three years alone, beating the market by over 60 percentage points (read more details here).

When it comes to Palo Alto Networks Inc (NYSE:PANW), our data show that smart money like the company more than other cybersecurity stocks. At the end of June, 45 funds held $735.49 million worth of stock, representing some 5% of the company. However, as the stock gained 20% between April and June, the number of investors with long positions declined by two, and the total value of the stakes slid from $953.21 million at the end of June, which can be explained by some investors’ desires to book profits. By comparison, Fortinet also witnessed a small decline in popularity as 26 funds disclosed stakes worth $322.14 million in aggregate as of the end of the second quarter.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!