There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze ServiceNow Inc (NYSE:NOW).
ServiceNow Inc (NYSE:NOW) shares haven’t seen a lot of action during the fourth quarter. Overall, hedge fund sentiment was unchanged. The stock was in 31 hedge funds’ portfolios at the end of the third quarter of 2016. At the end of this article we will also compare NOW to other stocks including AMETEK, Inc. (NYSE:AME), Regions Financial Corporation (NYSE:RF), and Dover Corp (NYSE:DOV) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What have hedge funds been doing with ServiceNow Inc (NYSE:NOW)?
At Q3’s end, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from the second quarter of 2016. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Ken Griffin’s Citadel Investment Group has the biggest position in ServiceNow Inc (NYSE:NOW), worth close to $218 million. The second largest stake is held by Criterion Capital, led by Christopher Lord, holding a $198.6 million position; the fund has 7.9% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish encompass Karthik Sarma’s SRS Investment Management, Christopher James’ Partner Fund Management and Josh Resnick’s Jericho Capital Asset Management.