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 Tenable Holdings, Inc. (NASDAQ:TENB) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Is Tenable Holdings, Inc. (NASDAQ:TENB) ready to rally soon? Hedge funds were becoming less confident. The number of bullish hedge fund bets fell by 2 recently. Tenable Holdings, Inc. (NASDAQ:TENB) was in 22 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 24. Our calculations also showed that TENB 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are a lot of gauges market participants employ to appraise their stock investments. A duo of the less utilized gauges are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the best fund managers can outperform the broader indices by a very impressive amount (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this lithium company which could also benefit from the electric car adoption. 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. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Now let’s take a look at the fresh hedge fund action surrounding Tenable Holdings, Inc. (NASDAQ:TENB).
How have hedgies been trading Tenable Holdings, Inc. (NASDAQ:TENB)?
Heading into the third quarter of 2020, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from one quarter earlier. By comparison, 17 hedge funds held shares or bullish call options in TENB a year ago. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
The largest stake in Tenable Holdings, Inc. (NASDAQ:TENB) was held by Sylebra Capital Management, which reported holding $66 million worth of stock at the end of September. It was followed by D E Shaw with a $53.6 million position. Other investors bullish on the company included Greenvale Capital, RGM Capital, and GLG Partners. In terms of the portfolio weights assigned to each position Greenvale Capital allocated the biggest weight to Tenable Holdings, Inc. (NASDAQ:TENB), around 6.8% of its 13F portfolio. RGM Capital is also relatively very bullish on the stock, designating 2.51 percent of its 13F equity portfolio to TENB.
Judging by the fact that Tenable Holdings, Inc. (NASDAQ:TENB) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of funds who sold off their positions entirely heading into Q3. It’s worth mentioning that Mark N. Diker’s Diker Management sold off the biggest investment of the “upper crust” of funds followed by Insider Monkey, totaling an estimated $5.3 million in stock. Andrew Kurita’s fund, Kettle Hill Capital Management, also said goodbye to its stock, about $3.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds heading into Q3.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Tenable Holdings, Inc. (NASDAQ:TENB) but similarly valued. We will take a look at Ternium S.A. (NYSE:TX), Community Bank System, Inc. (NYSE:CBU), Futu Holdings Limited (NASDAQ:FUTU), Amkor Technology, Inc. (NASDAQ:AMKR), Sabra Health Care REIT Inc (NASDAQ:SBRA), Atlantica Sustainable Infrastructure plc (NASDAQ:AY), and Grupo Televisa SAB (NYSE:TV). This group of stocks’ market caps are closest to TENB’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 15.1 hedge funds with bullish positions and the average amount invested in these stocks was $131 million. That figure was $252 million in TENB’s case. Amkor Technology, Inc. (NASDAQ:AMKR) is the most popular stock in this table. On the other hand Futu Holdings Limited (NASDAQ:FUTU) is the least popular one with only 8 bullish hedge fund positions. Tenable Holdings, Inc. (NASDAQ:TENB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TENB is 77.2. 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 24.8% in 2020 through the end of third quarter and still beat the market by 19.3 percentage points. Hedge funds were also right about betting on TENB as the stock returned 26.6% during Q3 and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.