At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards SailPoint Technologies Holdings, Inc. (NYSE:SAIL).
SailPoint Technologies Holdings, Inc. (NYSE:SAIL) shareholders have witnessed a decrease in enthusiasm from smart money of late. SAIL was in 21 hedge funds’ portfolios at the end of the first quarter of 2020. There were 25 hedge funds in our database with SAIL positions at the end of the previous quarter. Our calculations also showed that SAIL 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.
To the average investor there are numerous methods stock market investors put to use to value publicly traded companies. Some of the best methods are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the elite hedge fund managers can outpace the S&P 500 by a superb margin (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. 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 gander at the fresh hedge fund action surrounding SailPoint Technologies Holdings, Inc. (NYSE:SAIL).
Hedge fund activity in SailPoint Technologies Holdings, Inc. (NYSE:SAIL)
Heading into the second quarter of 2020, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in SAIL over the last 18 quarters. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
More specifically, SoMa Equity Partners was the largest shareholder of SailPoint Technologies Holdings, Inc. (NYSE:SAIL), with a stake worth $80.7 million reported as of the end of September. Trailing SoMa Equity Partners was RGM Capital, which amassed a stake valued at $37.1 million. Point72 Asset Management, Shannon River Fund Management, and Renaissance Technologies were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position SoMa Equity Partners allocated the biggest weight to SailPoint Technologies Holdings, Inc. (NYSE:SAIL), around 4.53% of its 13F portfolio. Shannon River Fund Management is also relatively very bullish on the stock, setting aside 3.07 percent of its 13F equity portfolio to SAIL.
Due to the fact that SailPoint Technologies Holdings, Inc. (NYSE:SAIL) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there was a specific group of hedgies that elected to cut their entire stakes last quarter. At the top of the heap, Anthony Joseph Vaccarino’s North Fourth Asset Management sold off the largest position of the “upper crust” of funds tracked by Insider Monkey, totaling an estimated $6.1 million in stock, and Parvinder Thiara’s Athanor Capital was right behind this move, as the fund cut about $3.9 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 4 funds last quarter.
Let’s now take a look at 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 CSG Systems International, Inc. (NASDAQ:CSGS), InterDigital, Inc. (NASDAQ:IDCC), The Goodyear Tire & Rubber Company (NASDAQ:GT), and Embraer SA (NYSE:ERJ). All of these 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|
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $195 million. That figure was $204 million in SAIL’s case. The Goodyear Tire & Rubber Company (NASDAQ:GT) is the most popular stock in this table. On the other hand Embraer SA (NYSE:ERJ) is the least popular one with only 16 bullish hedge fund positions. SailPoint Technologies Holdings, Inc. (NYSE:SAIL) is not the least popular stock in this group but hedge fund interest is still below average. 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 gained 12.2% in 2020 through June 17th and still beat the market by 14.8 percentage points. A small number of hedge funds were also right about betting on SAIL as the stock returned 64.3% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.