The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards CrowdStrike Holdings, Inc. (NASDAQ:CRWD).
Is CrowdStrike Holdings, Inc. (NASDAQ:CRWD) a good stock to buy now? CRWD was in 71 hedge funds’ portfolios at the end of September. The all time high for this statistics is 78. CRWD has seen a decrease in activity from the world’s largest hedge funds in recent months. There were 78 hedge funds in our database with CRWD holdings at the end of June. Our calculations also showed that CRWD isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Philippe Laffont of Coatue Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets. Tesla’s stock price skyrocketed, yet lithium prices are still below their 2019 highs. So, we are checking out this lithium stock right now. We go through lists like the 15 best blue chip stocks to buy 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. Keeping this in mind let’s check out the key hedge fund action surrounding CrowdStrike Holdings, Inc. (NASDAQ:CRWD).
What does smart money think about CrowdStrike Holdings, Inc. (NASDAQ:CRWD)?
Heading into the fourth quarter of 2020, a total of 71 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from the second quarter of 2020. On the other hand, there were a total of 29 hedge funds with a bullish position in CRWD a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Tiger Global Management LLC held the most valuable stake in CrowdStrike Holdings, Inc. (NASDAQ:CRWD), which was worth $1035 million at the end of the third quarter. On the second spot was Coatue Management which amassed $573.1 million worth of shares. Whale Rock Capital Management, Matrix Capital Management, and Two Sigma 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 Isomer Partners allocated the biggest weight to CrowdStrike Holdings, Inc. (NASDAQ:CRWD), around 8.6% of its 13F portfolio. Matrix Capital Management is also relatively very bullish on the stock, earmarking 5.48 percent of its 13F equity portfolio to CRWD.
Seeing as CrowdStrike Holdings, Inc. (NASDAQ:CRWD) has witnessed a decline in interest from hedge fund managers, it’s easy to see that there lies a certain “tier” of fund managers that slashed their entire stakes in the third quarter. At the top of the heap, Stuart J. Zimmer’s Zimmer Partners said goodbye to the biggest investment of all the hedgies monitored by Insider Monkey, valued at about $25.1 million in stock, and Gavin Baker’s Atreides Management was right behind this move, as the fund dropped about $24.7 million worth. These transactions are interesting, as total hedge fund interest dropped by 7 funds in the third quarter.
Let’s now review hedge fund activity in other stocks similar to CrowdStrike Holdings, Inc. (NASDAQ:CRWD). These stocks are Verisk Analytics, Inc. (NASDAQ:VRSK), KLA Corporation (NASDAQ:KLAC), Marriott International Inc (NYSE:MAR), MSCI Inc (NYSE:MSCI), The Hershey Company (NYSE:HSY), Republic Services, Inc. (NYSE:RSG), and Cadence Design Systems Inc (NASDAQ:CDNS). This group of stocks’ market valuations match CRWD’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VRSK | 40 | 1112108 | 4 |
| KLAC | 33 | 899003 | -4 |
| MAR | 56 | 2334020 | 8 |
| MSCI | 47 | 906149 | 3 |
| HSY | 43 | 1230648 | 4 |
| RSG | 37 | 870212 | 0 |
| CDNS | 37 | 1208067 | -2 |
| Average | 41.9 | 1222887 | 1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 41.9 hedge funds with bullish positions and the average amount invested in these stocks was $1223 million. That figure was $4301 million in CRWD’s case. Marriott International Inc (NYSE:MAR) is the most popular stock in this table. On the other hand KLA Corporation (NASDAQ:KLAC) is the least popular one with only 33 bullish hedge fund positions. Compared to these stocks CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is more popular among hedge funds. Our overall hedge fund sentiment score for CRWD is 75.3. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 30.7% in 2020 through November 27th but still managed to beat the market by 16.1 percentage points. Hedge funds were also right about betting on CRWD as the stock returned 9.8% since the end of September (through 11/27) 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.
