How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Qualys Inc (NASDAQ:QLYS).
Qualys Inc (NASDAQ:QLYS) has seen an increase in hedge fund interest lately. Our calculations also showed that QLYS isn’t among the 30 most popular stocks among hedge funds.
Today there are a multitude of methods shareholders put to use to appraise their holdings. Two of the less known methods are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the best money managers can beat the S&P 500 by a superb margin (see the details here).
We’re going to check out the fresh hedge fund action surrounding Qualys Inc (NASDAQ:QLYS).
How have hedgies been trading Qualys Inc (NASDAQ:QLYS)?
At the end of the third quarter, a total of 18 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 QLYS over the last 13 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Qualys Inc (NASDAQ:QLYS), which was worth $94.3 million at the end of the third quarter. On the second spot was Alkeon Capital Management which amassed $82.4 million worth of shares. Moreover, Two Sigma Advisors, Millennium Management, and AQR Capital Management were also bullish on Qualys Inc (NASDAQ:QLYS), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, some big names have jumped into Qualys Inc (NASDAQ:QLYS) headfirst. Millennium Management, managed by Israel Englander, established the most valuable position in Qualys Inc (NASDAQ:QLYS). Millennium Management had $8 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $0.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Matthew Hulsizer’s PEAK6 Capital Management, and Alec Litowitz and Ross Laser’s Magnetar Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Qualys Inc (NASDAQ:QLYS) but similarly valued. We will take a look at Laureate Education, Inc. (NASDAQ:LAUR), Helen of Troy Limited (NASDAQ:HELE), Spirit Realty Capital Inc (NYSE:SRC), and Zynga Inc (NASDAQ:ZNGA). This group of stocks’ market caps resemble QLYS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LAUR | 20 | 232602 | 6 |
| HELE | 12 | 155994 | -2 |
| SRC | 21 | 465528 | -8 |
| ZNGA | 26 | 614239 | 3 |
| Average | 19.75 | 367091 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $367 million. That figure was $221 million in QLYS’s case. Zynga Inc (NASDAQ:ZNGA) is the most popular stock in this table. On the other hand Helen of Troy Limited (NASDAQ:HELE) is the least popular one with only 12 bullish hedge fund positions. Qualys Inc (NASDAQ:QLYS) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ZNGA might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
