Fortinet (FTNT), Check Point Software (CHKP), Palo Alto Networks (PANW): What Hedge Funds Think of IT Security Stocks

Palo Alto Networks Inc (NYSE:PANW) appeared in the equity portfolio of 43 hedge funds, out of the 737 we track, and is thus the most popular of the three stocks. The company’s largest shareholders among institutional investors are Christopher Lord’s Criterion Capital, with 1.74 million shares, and Christopher Medlock James’ Partner Fund Management, with 661,200 shares. While these two investment firms reduced their exposure to the stock last quarter, 12 other hedge funds entered a new position in the company. Among them was Donald Chiboucis’ Columbus Circle Investors, which acquired 101,900 shares, valued at $12.49 million. Much to the delight of its bulls, Palo Alto Networks Inc (NYSE:PANW) gained a whopping 112% last year, and reached a 52-week high of $149.35 per share this March. Palo Alto is one of the best-performing tech stocks over the past 6 months, thanks to the 46% increase in share price achieved during this period. This trend is expected to persist in the future, as Palo Alto continues to expand its customer base, protecting thousands of companies, governments, and service providers through its unique security platform.

Tracking the activity of hedge funds is a great way to identify profitable investments that will help you beat the market. Here at Insider Monkey, we gather information regarding stock picks made by these investment firms and analyze their equity portfolios. However, the largest positions in the equity portfolio of hedge funds, do not always represent the great investment ideas, since large-cap stocks tend to deliver meager returns. Small-cap stocks on the other hand, such as some of the equities mentioned in this article, offer far greater returns. The small-cap hedge fund strategy we have devised -which is based on the hedge fund filings- returned 28.2% in 2014, 53.2% in 2013, and 33.3% in 2012.

Disclosure: none.