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Hedge Funds Can’t Buy Enough Of Everbridge, Inc. (EVBG)

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Everbridge, Inc. (NASDAQ:EVBG) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.

Is Everbridge, Inc. (NASDAQ:EVBG) undervalued? The best stock pickers were buying. The number of bullish hedge fund bets increased by 12 lately. Everbridge, Inc. (NASDAQ:EVBG) was in 43 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 37. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that EVBG isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 31 hedge funds in our database with EVBG holdings at the end of March.

Video: Watch our video about the top 5 most popular hedge fund stocks.

To most traders, hedge funds are viewed as underperforming, old investment vehicles of years past. While there are more than 8000 funds trading at the moment, Our researchers look at the crème de la crème of this club, approximately 850 funds. These investment experts command most of the hedge fund industry’s total asset base, and by shadowing their finest picks, Insider Monkey has figured out a few investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so if you have any good ideas send us an email. Keeping this in mind we’re going to take a look at the new hedge fund action regarding Everbridge, Inc. (NASDAQ:EVBG).

Hedge fund activity in Everbridge, Inc. (NASDAQ:EVBG)

Heading into the third quarter of 2020, a total of 43 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 39% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in EVBG over the last 20 quarters. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

The largest stake in Everbridge, Inc. (NASDAQ:EVBG) was held by Select Equity Group, which reported holding $512.3 million worth of stock at the end of September. It was followed by Sylebra Capital Management with a $208.5 million position. Other investors bullish on the company included Polar Capital, Motley Fool Asset Management, and Alta Park Capital. In terms of the portfolio weights assigned to each position Cota Capital allocated the biggest weight to Everbridge, Inc. (NASDAQ:EVBG), around 7.89% of its 13F portfolio. Sylebra Capital Management is also relatively very bullish on the stock, designating 6.5 percent of its 13F equity portfolio to EVBG.

With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the most valuable position in Everbridge, Inc. (NASDAQ:EVBG). Arrowstreet Capital had $22.8 million invested in the company at the end of the quarter. James Crichton’s Hitchwood Capital Management also initiated a $17.3 million position during the quarter. The following funds were also among the new EVBG investors: Michael Gelband’s ExodusPoint Capital, Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, and Greg Eisner’s Engineers Gate Manager.

Let’s check out hedge fund activity in other stocks similar to Everbridge, Inc. (NASDAQ:EVBG). These stocks are The Mosaic Company (NYSE:MOS), Kemper Corporation (NYSE:KMPR), Owl Rock Capital Corporation (NYSE:ORCC), New York Community Bancorp, Inc. (NYSE:NYCB), Flowers Foods, Inc. (NYSE:FLO), Nutanix, Inc. (NASDAQ:NTNX), and HollyFrontier Corporation (NYSE:HFC). All of these stocks’ market caps are closest to EVBG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MOS 32 450160 3
KMPR 16 37427 3
ORCC 15 136062 4
NYCB 28 221363 6
FLO 24 269421 -3
NTNX 20 584504 -9
HFC 27 273880 3
Average 23.1 281831 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.1 hedge funds with bullish positions and the average amount invested in these stocks was $282 million. That figure was $1162 million in EVBG’s case. The Mosaic Company (NYSE:MOS) is the most popular stock in this table. On the other hand Owl Rock Capital Corporation (NYSE:ORCC) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Everbridge, Inc. (NASDAQ:EVBG) is more popular among hedge funds. Our overall hedge fund sentiment score for EVBG is 90. 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. 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 33% in 2020 through the end of August and still beat the market by 23.2 percentage points. Unfortunately EVBG wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on EVBG were disappointed as the stock returned 7.4% since the end of the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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Disclosure: None. This article was originally published at Insider Monkey.