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Hedge Funds Are Betting On Okta, Inc. (OKTA)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Okta, Inc. (NASDAQ:OKTA) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is Okta, Inc. (NASDAQ:OKTA) a first-rate investment now? Prominent investors are becoming more confident. The number of long hedge fund bets inched up by 5 recently. Our calculations also showed that OKTA isn’t among the 30 most popular stocks among hedge funds.  was in 32 hedge funds’ portfolios at the end of the third quarter of 2018. There were 27 hedge funds in our database with OKTA holdings at the end of the previous quarter.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

RENAISSANCE TECHNOLOGIESLet’s review the recent hedge fund action regarding Okta, Inc. (NASDAQ:OKTA).

What does the smart money think about Okta, Inc. (NASDAQ:OKTA)?

At the end of the third quarter, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in OKTA over the last 13 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

OKTA_dec2018

Among these funds, Whale Rock Capital Management held the most valuable stake in Okta, Inc. (NASDAQ:OKTA), which was worth $159.5 million at the end of the third quarter. On the second spot was Alkeon Capital Management which amassed $137.6 million worth of shares. Moreover, Renaissance Technologies, Two Sigma Advisors, and Citadel Investment Group were also bullish on Okta, Inc. (NASDAQ:OKTA), allocating a large percentage of their portfolios to this stock.

As one would reasonably expect, some big names have jumped into Okta, Inc. (NASDAQ:OKTA) headfirst. Whale Rock Capital Management, managed by Alex Sacerdote, assembled the largest position in Okta, Inc. (NASDAQ:OKTA). Whale Rock Capital Management had $159.5 million invested in the company at the end of the quarter. Pasco Alfaro / Richard Tumure’s Miura Global Management also initiated a $7 million position during the quarter. The other funds with brand new OKTA positions are Brian Ashford-Russell and Tim Woolley’s Polar Capital, Matthew Hulsizer’s PEAK6 Capital Management, and Sander Gerber’s Hudson Bay Capital Management.

Let’s check out hedge fund activity in other stocks similar to Okta, Inc. (NASDAQ:OKTA). We will take a look at Whirlpool Corporation (NYSE:WHR), Pentair plc (NYSE:PNR), Autoliv Inc. (NYSE:ALV), and Carlyle Group LP (NASDAQ:CG). This group of stocks’ market values are similar to OKTA’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WHR 23 586011 -1
PNR 24 710513 1
ALV 13 556381 -1
CG 10 123719 0
Average 17.5 494156 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $494 million. That figure was $601 million in OKTA’s case. Pentair plc (NYSE:PNR) is the most popular stock in this table. On the other hand Carlyle Group LP (NASDAQ:CG) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Okta, Inc. (NASDAQ:OKTA) 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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