The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about ForeScout Technologies, Inc. (NASDAQ:FSCT)?
Is ForeScout Technologies, Inc. (NASDAQ:FSCT) the right pick for your portfolio? Hedge funds are taking a bullish view. The number of bullish hedge fund bets increased by 12 recently. Our calculations also showed that FSCT 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.
If you’d ask most stock holders, hedge funds are seen as underperforming, outdated financial tools of yesteryear. While there are greater than 8000 funds in operation today, We choose to focus on the top tier of this group, approximately 850 funds. These hedge fund managers have their hands on the majority of all hedge funds’ total asset base, and by monitoring their highest performing stock picks, Insider Monkey has formulated numerous investment strategies that have historically defeated Mr. Market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
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 new hedge fund action surrounding ForeScout Technologies, Inc. (NASDAQ:FSCT).
What have hedge funds been doing with ForeScout Technologies, Inc. (NASDAQ:FSCT)?
At the end of the first quarter, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 57% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards FSCT over the last 18 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Water Island Capital, managed by John Orrico, holds the biggest position in ForeScout Technologies, Inc. (NASDAQ:FSCT). Water Island Capital has a $60.4 million position in the stock, comprising 4.4% of its 13F portfolio. Sitting at the No. 2 spot is Sand Grove Capital Partners, managed by Simon Davies, which holds a $59.9 million position; 10.7% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that hold long positions contain David Alexander Witkin’s Beryl Capital Management, Michel Massoud’s Melqart Asset Management and Robert Emil Zoellner’s Alpine Associates. In terms of the portfolio weights assigned to each position Sand Grove Capital Partners allocated the biggest weight to ForeScout Technologies, Inc. (NASDAQ:FSCT), around 10.71% of its 13F portfolio. Beryl Capital Management is also relatively very bullish on the stock, earmarking 10.15 percent of its 13F equity portfolio to FSCT.
Now, key money managers were breaking ground themselves. Water Island Capital, managed by John Orrico, created the biggest position in ForeScout Technologies, Inc. (NASDAQ:FSCT). Water Island Capital had $60.4 million invested in the company at the end of the quarter. Simon Davies’s Sand Grove Capital Partners also made a $59.9 million investment in the stock during the quarter. The other funds with new positions in the stock are David Alexander Witkin’s Beryl Capital Management, Michel Massoud’s Melqart Asset Management, and Robert Emil Zoellner’s Alpine Associates.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as ForeScout Technologies, Inc. (NASDAQ:FSCT) but similarly valued. We will take a look at Kennametal Inc. (NYSE:KMT), Albany International Corp. (NYSE:AIN), FormFactor, Inc. (NASDAQ:FORM), and Macy’s, Inc. (NYSE:M). All of these stocks’ market caps match FSCT’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 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $162 million. That figure was $422 million in FSCT’s case. Macy’s, Inc. (NYSE:M) is the most popular stock in this table. On the other hand Kennametal Inc. (NYSE:KMT) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks ForeScout Technologies, Inc. (NASDAQ:FSCT) 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 gained 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. Unfortunately FSCT wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on FSCT were disappointed as the stock returned -25.3% during the second quarter (through the end of May) 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.
Disclosure: None. This article was originally published at Insider Monkey.