Check Point Software Technologies (CHKP): Hedge Funds Are Cashing Out

We at Insider Monkey have gone over 873 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article, we look at what those funds think of Check Point Software Technologies Ltd. (NASDAQ:CHKP) based on that data.

Check Point Software Technologies Ltd. (NASDAQ:CHKP) investors should be aware of a decrease in enthusiasm from smart money in recent months. Check Point Software Technologies Ltd. (NASDAQ:CHKP) was in 29 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 35. Our calculations also showed that CHKP isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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David E. Shaw of D.E. Shaw

David E. Shaw of D.E. Shaw

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

At the end of June, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CHKP over the last 24 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, John Overdeck and David Siegel’s Two Sigma Advisors has the largest position in Check Point Software Technologies Ltd. (NASDAQ:CHKP), worth close to $134.1 million, comprising 0.4% of its total 13F portfolio. On Two Sigma Advisors’s heels is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $86.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions comprise D. E. Shaw’s D E Shaw, Anand Parekh’s Alyeska Investment Group and John W. Rogers’s Ariel Investments. In terms of the portfolio weights assigned to each position Te Ahumairangi Investment Management allocated the biggest weight to Check Point Software Technologies Ltd. (NASDAQ:CHKP), around 1.8% of its 13F portfolio. Alyeska Investment Group is also relatively very bullish on the stock, earmarking 0.68 percent of its 13F equity portfolio to CHKP.

Because Check Point Software Technologies Ltd. (NASDAQ:CHKP) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of hedge funds who were dropping their positions entirely heading into Q3. It’s worth mentioning that Parvinder Thiara’s Athanor Capital said goodbye to the largest stake of the 750 funds monitored by Insider Monkey, comprising an estimated $2.1 million in stock, and Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management was right behind this move, as the fund dumped about $1.5 million worth. These moves are important to note, as total hedge fund interest was cut by 2 funds heading into Q3.

Let’s now review hedge fund activity in other stocks similar to Check Point Software Technologies Ltd. (NASDAQ:CHKP). We will take a look at Altice USA, Inc. (NYSE:ATUS), Natura &Co Holding S.A. (NYSE:NTCO), The Liberty SiriusXM Group (NASDAQ:LSXMA), XPO Logistics Inc (NYSE:XPO), NICE Ltd (NASDAQ:NICE), Westinghouse Air Brake Technologies Corporation (NYSE:WAB), and Textron Inc. (NYSE:TXT). All of these stocks’ market caps resemble CHKP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ATUS 44 3176106 -4
NTCO 5 62101 1
LSXMA 43 1926503 5
XPO 57 3137995 17
NICE 22 1035023 -11
WAB 46 2823758 6
TXT 22 962305 1
Average 34.1 1874827 2.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 34.1 hedge funds with bullish positions and the average amount invested in these stocks was $1875 million. That figure was $647 million in CHKP’s case. XPO Logistics Inc (NYSE:XPO) is the most popular stock in this table. On the other hand Natura &Co Holding S.A. (NYSE:NTCO) is the least popular one with only 5 bullish hedge fund positions. Check Point Software Technologies Ltd. (NASDAQ:CHKP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CHKP is 50.9. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. A small number of hedge funds were also right about betting on CHKP as the stock returned 4.4% since the end of the second quarter (through 10/15) and outperformed the market by an even larger margin.

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