Is Five9 (FIVN) Stock A Buy or Sell?

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 have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider Five9 Inc (NASDAQ:FIVN) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is FIVN stock a buy or sell? Hedge fund interest in Five9 Inc (NASDAQ:FIVN) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that FIVN isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). At the end of this article we will also compare FIVN to other stocks including Fidelity National Financial Inc (NYSE:FNF), Concho Resources Inc. (NYSE:CXO), and WestRock Company (NYSE:WRK) to get a better sense of its popularity.

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 124 percentage points since March 2017 (see the details here).

Ryan Tolkin, CIO of Schonfeld Strategic Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock that will deliver a 10x return. 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 homepage (or at the end of this article).Now let’s take a gander at the key hedge fund action regarding Five9 Inc (NASDAQ:FIVN).

Do Hedge Funds Think FIVN Is A Good Stock To Buy Now?

At Q4’s end, a total of 47 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FIVN over the last 22 quarters. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

Among these funds, Whale Rock Capital Management held the most valuable stake in Five9 Inc (NASDAQ:FIVN), which was worth $558.7 million at the end of the fourth quarter. On the second spot was Alkeon Capital Management which amassed $526.6 million worth of shares. SQN Investors, Point72 Asset Management, and Arrowstreet 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 Calixto Global Investors allocated the biggest weight to Five9 Inc (NASDAQ:FIVN), around 9.13% of its 13F portfolio. SQN Investors is also relatively very bullish on the stock, designating 8.24 percent of its 13F equity portfolio to FIVN.

Since Five9 Inc (NASDAQ:FIVN) has experienced falling interest from the entirety of the hedge funds we track, it’s safe to say that there were a few fund managers that decided to sell off their entire stakes by the end of the fourth quarter. Intriguingly, Sanjay Venkat’s Jeneq Management dropped the largest investment of the “upper crust” of funds tracked by Insider Monkey, worth close to $25.6 million in stock. David Fiszel’s fund, Honeycomb Asset Management, also sold off its stock, about $12 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Five9 Inc (NASDAQ:FIVN) but similarly valued. These stocks are Fidelity National Financial Inc (NYSE:FNF), Concho Resources Inc. (NYSE:CXO), WestRock Company (NYSE:WRK), DENTSPLY SIRONA Inc. (NASDAQ:XRAY), Equitable Holdings, Inc. (NYSE:EQH), Appian Corporation (NASDAQ:APPN), and UDR, Inc. (NYSE:UDR). This group of stocks’ market values are closest to FIVN’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FNF 40 1337274 -4
CXO 41 1045563 -6
WRK 43 668766 11
XRAY 28 1224435 3
EQH 46 1269636 10
APPN 24 1163680 9
UDR 23 482699 -3
Average 35 1027436 2.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 35 hedge funds with bullish positions and the average amount invested in these stocks was $1027 million. That figure was $1930 million in FIVN’s case. Equitable Holdings, Inc. (NYSE:EQH) is the most popular stock in this table. On the other hand UDR, Inc. (NYSE:UDR) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks Five9 Inc (NASDAQ:FIVN) is more popular among hedge funds. Our overall hedge fund sentiment score for FIVN is 85. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Unfortunately FIVN wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on FIVN were disappointed as the stock returned -6.6% since the end of the fourth quarter (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

Follow Five9 Inc. (NASDAQ:FIVN)

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