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Cloudera, Inc. (CLDR): Are Hedge Funds Right About This Stock?

Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant outperformance. That’s why we pay special attention to hedge fund activity in these stocks.

Is Cloudera, Inc. (NYSE:CLDR) undervalued? Prominent investors are taking a bullish view. The number of bullish hedge fund positions inched up by 12 recently. Our calculations also showed that CLDR isn’t among the 30 most popular stocks among hedge funds.

In today’s marketplace there are tons of signals market participants employ to assess stocks. A couple of the most useful signals are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the best money managers can outclass the broader indices by a solid margin (see the details here).

CITADEL INVESTMENT GROUP

We’re going to go over the fresh hedge fund action surrounding Cloudera, Inc. (NYSE:CLDR).

How are hedge funds trading Cloudera, Inc. (NYSE:CLDR)?

At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 92% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in CLDR heading into this year. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

CLDR_dec2018

More specifically, Renaissance Technologies was the largest shareholder of Cloudera, Inc. (NYSE:CLDR), with a stake worth $28.1 million reported as of the end of September. Trailing Renaissance Technologies was Millennium Management, which amassed a stake valued at $20 million. Citadel Investment Group, Brookside Capital, and Marshall Wace LLP were also very fond of the stock, giving the stock large weights in their portfolios.

As aggregate interest increased, some big names have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, initiated the biggest position in Cloudera, Inc. (NYSE:CLDR). Renaissance Technologies had $28.1 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $8.3 million position during the quarter. The other funds with brand new CLDR positions are Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital, Frank Slattery’s Symmetry Peak Management, and Dmitry Balyasny’s Balyasny Asset Management.

Let’s also examine hedge fund activity in other stocks similar to Cloudera, Inc. (NYSE:CLDR). We will take a look at Integer Holdings Corporation (NYSE:ITGR), Legg Mason, Inc. (NYSE:LM), Washington Federal Inc. (NASDAQ:WAFD), and Fox Factory Holding Corp (NASDAQ:FOXF). This group of stocks’ market values are closest to CLDR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ITGR 17 247639 -5
LM 20 156049 3
WAFD 13 74324 0
FOXF 10 22901 1
Average 15 125228 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $125 million. That figure was $113 million in CLDR’s case. Legg Mason, Inc. (NYSE:LM) is the most popular stock in this table. On the other hand Fox Factory Holding Corp (NASDAQ:FOXF) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Cloudera, Inc. (NYSE:CLDR) 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.

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

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