The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 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 March 31st, a week after the market trough. In this article we look at what those investors think of Everbridge, Inc. (NASDAQ:EVBG).
Everbridge, Inc. (NASDAQ:EVBG) has experienced a decrease in activity from the world’s largest hedge funds lately. EVBG was in 31 hedge funds’ portfolios at the end of March. There were 37 hedge funds in our database with EVBG holdings at the end of the previous quarter. Our calculations also showed that EVBG isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 51 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to check out the key hedge fund action regarding Everbridge, Inc. (NASDAQ:EVBG).
What does smart money think about Everbridge, Inc. (NASDAQ:EVBG)?
At Q1’s end, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of -16% from the fourth quarter of 2019. By comparison, 30 hedge funds held shares or bullish call options in EVBG a year ago. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
More specifically, Select Equity Group was the largest shareholder of Everbridge, Inc. (NASDAQ:EVBG), with a stake worth $360.6 million reported as of the end of September. Trailing Select Equity Group was Sylebra Capital Management, which amassed a stake valued at $168.5 million. Polar Capital, Motley Fool Asset Management, and Driehaus Capital 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 Cota Capital allocated the biggest weight to Everbridge, Inc. (NASDAQ:EVBG), around 8.59% of its 13F portfolio. Alta Park Capital is also relatively very bullish on the stock, earmarking 7.21 percent of its 13F equity portfolio to EVBG.
Due to the fact that Everbridge, Inc. (NASDAQ:EVBG) has faced falling interest from the entirety of the hedge funds we track, we can see that there exists a select few funds that slashed their entire stakes in the first quarter. At the top of the heap, David Gallo’s Valinor Management LLC dropped the largest investment of the “upper crust” of funds followed by Insider Monkey, comprising about $35.8 million in stock. Mark Coe’s fund, Intrinsic Edge Capital, also sold off its stock, about $9.5 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 6 funds in the first quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Everbridge, Inc. (NASDAQ:EVBG) but similarly valued. We will take a look at Helen of Troy Limited (NASDAQ:HELE), Healthequity Inc (NASDAQ:HQY), BridgeBio Pharma, Inc. (NASDAQ:BBIO), and eHealth, Inc. (NASDAQ:EHTH). All of these stocks’ market caps are closest to EVBG’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 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $464 million. That figure was $797 million in EVBG’s case. eHealth, Inc. (NASDAQ:EHTH) is the most popular stock in this table. On the other hand BridgeBio Pharma, Inc. (NASDAQ:BBIO) is the least popular one with only 12 bullish hedge fund positions. Everbridge, Inc. (NASDAQ:EVBG) is not the most popular stock in this group but hedge fund interest is still above average. 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 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on EVBG as the stock returned 37.5% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.