Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Fair Isaac Corporation (NYSE:FICO) based on that data.
Fair Isaac Corporation (NYSE:FICO) shareholders have witnessed a decrease in hedge fund interest in recent months. FICO was in 41 hedge funds’ portfolios at the end of March. There were 45 hedge funds in our database with FICO positions at the end of the previous quarter. Our calculations also showed that FICO 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.
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David Atterbury of Whetstone Capital Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. 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 view the recent hedge fund action regarding Fair Isaac Corporation (NYSE:FICO).
What does smart money think about Fair Isaac Corporation (NYSE:FICO)?
At the end of the first quarter, a total of 41 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from the fourth quarter of 2019. By comparison, 27 hedge funds held shares or bullish call options in FICO a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Among these funds, Melvin Capital Management held the most valuable stake in Fair Isaac Corporation (NYSE:FICO), which was worth $296.9 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $152.6 million worth of shares. Ako Capital, Valley Forge Capital, and Newbrook Capital Advisors 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 Valley Forge Capital allocated the biggest weight to Fair Isaac Corporation (NYSE:FICO), around 22.17% of its 13F portfolio. Broad Bay Capital is also relatively very bullish on the stock, designating 14.05 percent of its 13F equity portfolio to FICO.
Because Fair Isaac Corporation (NYSE:FICO) has experienced falling interest from the aggregate hedge fund industry, we can see that there is a sect of hedge funds that elected to cut their positions entirely heading into Q4. It’s worth mentioning that Aaron Cowen’s Suvretta Capital Management dropped the biggest stake of the 750 funds followed by Insider Monkey, valued at about $48.8 million in stock, and Gregg Moskowitz’s Interval Partners was right behind this move, as the fund sold off about $19 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 4 funds heading into Q4.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Fair Isaac Corporation (NYSE:FICO) but similarly valued. We will take a look at Elanco Animal Health Incorporated (NYSE:ELAN), NICE Ltd (NASDAQ:NICE), Gartner Inc (NYSE:IT), and Pinterest, Inc. (NYSE:PINS). All of these stocks’ market caps are closest to FICO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ELAN | 26 | 340715 | 3 |
| NICE | 22 | 373814 | 3 |
| IT | 32 | 973145 | 6 |
| PINS | 38 | 410292 | 1 |
| Average | 29.5 | 524492 | 3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.5 hedge funds with bullish positions and the average amount invested in these stocks was $524 million. That figure was $1225 million in FICO’s case. Pinterest, Inc. (NYSE:PINS) is the most popular stock in this table. On the other hand NICE Ltd (NASDAQ:NICE) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Fair Isaac Corporation (NYSE:FICO) is more popular among hedge funds. 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 returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on FICO as the stock returned 30.9% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
