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Hedge Funds Have Never Been This Bullish On Proofpoint Inc (PFPT)

We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Proofpoint Inc (NASDAQ:PFPT) based on that data.

Is Proofpoint Inc (NASDAQ:PFPT) a buy here? Prominent investors are taking a bullish view. The number of long hedge fund bets went up by 6 recently. Our calculations also showed that pfpt isn’t among the 30 most popular stocks among hedge funds. PFPT was in 33 hedge funds’ portfolios at the end of March. There were 27 hedge funds in our database with PFPT positions at the end of the previous quarter.

To most investors, hedge funds are viewed as slow, outdated investment vehicles of years past. While there are over 8000 funds with their doors open today, Our experts hone in on the upper echelon of this club, about 750 funds. It is estimated that this group of investors manage most of the smart money’s total capital, and by shadowing their finest investments, Insider Monkey has formulated various investment strategies that have historically outrun the market. Insider Monkey’s flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period.

Ken Griffin

We’re going to go over the fresh hedge fund action surrounding Proofpoint Inc (NASDAQ:PFPT).

What have hedge funds been doing with Proofpoint Inc (NASDAQ:PFPT)?

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 22% from the previous quarter. On the other hand, there were a total of 20 hedge funds with a bullish position in PFPT a year ago. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

No of Hedge Funds with PFPT Positions

The largest stake in Proofpoint Inc (NASDAQ:PFPT) was held by Alkeon Capital Management, which reported holding $92.1 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $64.3 million position. Other investors bullish on the company included Citadel Investment Group, Polar Capital, and RGM Capital.

With a general bullishness amongst the heavyweights, key money managers have jumped into Proofpoint Inc (NASDAQ:PFPT) headfirst. Alkeon Capital Management, managed by Panayotis Takis Sparaggis, initiated the biggest position in Proofpoint Inc (NASDAQ:PFPT). Alkeon Capital Management had $92.1 million invested in the company at the end of the quarter. Amish Mehta’s SQN Investors also initiated a $20.9 million position during the quarter. The other funds with brand new PFPT positions are Seymour Sy Kaufman and Michael Stark’s Crosslink Capital, Charles Clough’s Clough Capital Partners, and Bain Capital’s Brookside Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Proofpoint Inc (NASDAQ:PFPT) but similarly valued. We will take a look at Dr. Reddy’s Laboratories Limited (NYSE:RDY), Israel Chemicals Ltd. (NYSE:ICL), Fortune Brands Home & Security Inc (NYSE:FBHS), and AptarGroup, Inc. (NYSE:ATR). All of these stocks’ market caps resemble PFPT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RDY 11 91252 1
ICL 4 54026 -1
FBHS 29 568628 -2
ATR 15 81382 -2
Average 14.75 198822 -1

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $199 million. That figure was $660 million in PFPT’s case. Fortune Brands Home & Security Inc (NYSE:FBHS) is the most popular stock in this table. On the other hand Israel Chemicals Ltd. (NYSE:ICL) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Proofpoint Inc (NASDAQ:PFPT) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately PFPT wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on PFPT were disappointed as the stock returned -5.5% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.

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

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