Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards SailPoint Technologies Holdings, Inc. (NYSE:SAIL) to find out whether there were any major changes in hedge funds’ views.
Is SailPoint Technologies Holdings, Inc. (NYSE:SAIL) worth your attention right now? The smart money was getting less bullish. The number of long hedge fund positions shrunk by 6 lately. SailPoint Technologies Holdings, Inc. (NYSE:SAIL) was in 23 hedge funds’ portfolios at the end of June. The all time high for this statistic is 32. Our calculations also showed that SAIL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Gil Simon of SoMa Equity Partners
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Do Hedge Funds Think SAIL Is A Good Stock To Buy Now?
At the end of June, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -21% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SAIL over the last 24 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in SailPoint Technologies Holdings, Inc. (NYSE:SAIL) was held by HMI Capital, which reported holding $388 million worth of stock at the end of June. It was followed by SoMa Equity Partners with a $270.7 million position. Other investors bullish on the company included Eminence Capital, RGM Capital, and Jeneq Management. In terms of the portfolio weights assigned to each position HMI Capital allocated the biggest weight to SailPoint Technologies Holdings, Inc. (NYSE:SAIL), around 12.15% of its 13F portfolio. Jeneq Management is also relatively very bullish on the stock, dishing out 7.55 percent of its 13F equity portfolio to SAIL.
Since SailPoint Technologies Holdings, Inc. (NYSE:SAIL) has faced declining sentiment from the aggregate hedge fund industry, we can see that there exists a select few hedge funds that elected to cut their full holdings by the end of the second quarter. It’s worth mentioning that Steve Cohen’s Point72 Asset Management said goodbye to the largest stake of the “upper crust” of funds followed by Insider Monkey, valued at close to $19.6 million in stock. Ken Griffin’s fund, Citadel Investment Group, also cut its stock, about $16.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 6 funds by the end of the second quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as SailPoint Technologies Holdings, Inc. (NYSE:SAIL) but similarly valued. We will take a look at OneConnect Financial Technology Co., Ltd. (NYSE:OCFT), Wingstop Inc (NASDAQ:WING), AllianceBernstein Holding LP (NYSE:AB), FTI Consulting, Inc. (NYSE:FCN), Exponent, Inc. (NASDAQ:EXPO), Cloudera, Inc. (NYSE:CLDR), and Inari Medical, Inc. (NASDAQ:NARI). This group of stocks’ market caps are similar to SAIL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OCFT | 13 | 37724 | 3 |
| WING | 24 | 230727 | 1 |
| AB | 9 | 38577 | 1 |
| FCN | 30 | 384021 | 6 |
| EXPO | 20 | 91869 | 3 |
| CLDR | 34 | 1377101 | 4 |
| NARI | 30 | 405211 | 8 |
| Average | 22.9 | 366461 | 3.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.9 hedge funds with bullish positions and the average amount invested in these stocks was $366 million. That figure was $1060 million in SAIL’s case. Cloudera, Inc. (NYSE:CLDR) is the most popular stock in this table. On the other hand AllianceBernstein Holding LP (NYSE:AB) is the least popular one with only 9 bullish hedge fund positions. SailPoint Technologies Holdings, Inc. (NYSE:SAIL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SAIL is 48.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately SAIL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SAIL were disappointed as the stock returned -8% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Sailpoint Technologies Holdings Inc. (NYSE:SAIL)
Follow Sailpoint Technologies Holdings Inc. (NYSE:SAIL)
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Disclosure: None. This article was originally published at Insider Monkey.
