Is Cyberark Software Ltd (CYBR) a Good Stock To Buy?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Cyberark Software Ltd (NASDAQ:CYBR).

Cyberark Software Ltd (NASDAQ:CYBR) has experienced a decrease in enthusiasm from smart money of late. During the third quarter, the number of investors tracked by Insider Monkey long the stock declined by two to 20.  However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Diebold Incorporated (NYSE:DBD), Eagle Bancorp, Inc. (NASDAQ:EGBN), and Steelcase Inc. (NYSE:SCS) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Keeping this in mind, we’re going to check out the key action encompassing Cyberark Software Ltd (NASDAQ:CYBR).

Hedge fund activity in Cyberark Software Ltd (NASDAQ:CYBR)

Heading into the fourth quarter of 2016, a total of 20 of the hedge funds followed by Insider Monkey held long positions in this stock, down by 9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CYBR over the last five quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Brookside Capital, led by Bain Capital, holds the number one position in Cyberark Software Ltd (NASDAQ:CYBR). Brookside Capital has a $43.3 million position in the stock, comprising 2.8% of its 13F portfolio. The second most bullish fund is Brian Ashford-Russell and Tim Woolley’s Polar Capital, with a $33.2 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other peers with similar optimism comprise Ryan Frick and Oliver Evans’s Dorsal Capital Management, Beeneet Kothari’s Tekne Capital Management, and George Soros’ Soros Fund Management. We should note that two of these hedge funds (Dorsal Capital Management and Soros Fund Management) are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Since Cyberark Software Ltd (NASDAQ:CYBR) has sustained bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few fund managers that slashed their full holdings in the third quarter. Interestingly, Paul Singer’s Elliott Management cut the largest position of all the investors monitored by Insider Monkey, worth about $13 million in call options. Dmitry Balyasny’s fund, Balyasny Asset Management, also said goodbye to its call options, worth about $4.9 million.

Let’s also examine hedge fund activity in other stocks similar to Cyberark Software Ltd (NASDAQ:CYBR). These stocks are Diebold Incorporated (NYSE:DBD), Eagle Bancorp, Inc. (NASDAQ:EGBN), Steelcase Inc. (NYSE:SCS), and Gannett Co., Inc. (NYSE:GCI). This group of stocks’ market values are closest to CYBR’s market value.

As you can see these stocks had an average of 18 funds with bullish positions and the average amount invested in these stocks was $114 million. That figure was $175 million in CYBR’s case. Diebold Incorporated (NYSE:DBD) is the most popular stock in this table. On the other hand Eagle Bancorp, Inc. (NASDAQ:EGBN) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Cyberark Software Ltd (NASDAQ:CYBR) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.