Is Alteryx (AYX) a Smart Long-term Buy?

Brown Capital Management Small Company Fund recently released its Q3 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 5.35% (instl. class) for the quarter, underperforming its benchmark, the Russell 2,000 Growth Index which returned 7.16% in the same quarter. You should check out Brown Capital Management’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q3 2020 Investor Letter, Brown Capital Management highlighted a few stocks and Alteryx Inc. (NYSE:AYX) is one of them. Alteryx Inc. (NYSE:AYX) is a computer software company. Year-to-date, Alteryx Inc. (NYSE:AYX) stock gained 19.7% and on December 15th it had a closing price of $119.77. Here is what Brown Capital Management said:

“Alteryx provides comprehensive self-service data-analytics software to data scientists and business analysts for finding and sharing data, preparing and blending it, performing a variety of analysis, sharing insights, and automation, without the need for coding. Alteryx’s software is unique in combining a comprehensive dataanalytics platform with ease of use, driving dramatic improvements in business productivity and outcomes. We believe Alteryx has a large market opportunity given its ability to help data scientists as well as business analysts who have limited technical capabilities. Alteryx serves a broad base of customers across all verticals and all sizes.

During the second quarter, Alteryx reported slower revenue growth relative to prior periods, and guided down full-year revenue below expectations. The revenue slowdown was partly driven by customers in certain areas that were heavily impacted by COVID-19, like small businesses and companies in the hospitality vertical, that slowed spending on new purchases and expansions. Additionally, the company noted that some customers are taking longer to make purchase decisions, extending sales cycles. These developments led to the underperformance during the third quarter. We believe the revenue slowdown is a short-term phenomenon, and continue to believe Alteryx has a large market opportunity and a long runway for multiyear growth.”

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In Q3 2020, the number of bullish hedge fund positions on Alteryx Inc. (NYSE:AYX) stock decreased by about 15% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t believe in Alteryx’s growth potential. Our calculations showed that Alteryx Inc. (NYSE:AYX) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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