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Do Hedge Funds Love Alteryx, Inc. (AYX)?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Alteryx, Inc. (NYSE:AYX) based on that data.

Alteryx, Inc. (NYSE:AYX) shareholders have witnessed a decrease in enthusiasm from smart money lately. AYX was in 43 hedge funds’ portfolios at the end of the first quarter of 2020. There were 44 hedge funds in our database with AYX positions at the end of the previous quarter. Our calculations also showed that AYX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 44 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Keith Meister of Corvex Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a peek at the new hedge fund action regarding Alteryx, Inc. (NYSE:AYX).

What have hedge funds been doing with Alteryx, Inc. (NYSE:AYX)?

At Q1’s end, a total of 43 of the hedge funds tracked by Insider Monkey were long this stock, a change of -2% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in AYX over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Abdiel Capital Advisors, managed by Colin Moran, holds the biggest position in Alteryx, Inc. (NYSE:AYX). Abdiel Capital Advisors has a $351 million position in the stock, comprising 16.4% of its 13F portfolio. The second most bullish fund manager is Alkeon Capital Management, led by Panayotis Takis Sparaggis, holding a $200 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions comprise Alex Sacerdote’s Whale Rock Capital Management, Brian Ashford-Russell and Tim Woolley’s Polar Capital and Keith Meister’s Corvex Capital. In terms of the portfolio weights assigned to each position Abdiel Capital Advisors allocated the biggest weight to Alteryx, Inc. (NYSE:AYX), around 16.41% of its 13F portfolio. Cowbird Capital is also relatively very bullish on the stock, setting aside 12.57 percent of its 13F equity portfolio to AYX.

Due to the fact that Alteryx, Inc. (NYSE:AYX) has experienced falling interest from the entirety of the hedge funds we track, we can see that there is a sect of hedge funds that slashed their entire stakes by the end of the third quarter. Interestingly, Stanley Druckenmiller’s Duquesne Capital dumped the largest investment of all the hedgies monitored by Insider Monkey, comprising an estimated $11 million in stock, and Louis Bacon’s Moore Global Investments was right behind this move, as the fund said goodbye to about $10.5 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 1 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Alteryx, Inc. (NYSE:AYX). We will take a look at Universal Display Corporation (NASDAQ:OLED), PPD, Inc. (NASDAQ:PPD), OGE Energy Corp. (NYSE:OGE), and A. O. Smith Corporation (NYSE:AOS). This group of stocks’ market valuations are similar to AYX’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
OLED 24 222953 -7
PPD 27 512293 27
OGE 21 215864 4
AOS 25 363596 -1
Average 24.25 328677 5.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.25 hedge funds with bullish positions and the average amount invested in these stocks was $329 million. That figure was $1020 million in AYX’s case. PPD, Inc. (NASDAQ:PPD) is the most popular stock in this table. On the other hand OGE Energy Corp. (NYSE:OGE) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Alteryx, Inc. (NYSE:AYX) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on AYX as the stock returned 51.2% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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