Is Imperva Inc (IMPV) Going To Burn These Hedge Funds?

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The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Imperva Inc (NYSE:IMPV).

Imperva Inc (NYSE:IMPV) was in 33 hedge funds’ portfolios at the end of the third quarter of 2016. IMPV has seen an increase in hedge fund sentiment lately. There were 21 hedge funds in our database with IMPV holdings at the end of the previous quarter. At the end of this article we will also compare IMPV to other stocks including Stag Industrial Inc (NYSE:STAG), Impax Laboratories Inc (NASDAQ:IPXL), and Brady Corp (NYSE:BRC) to get a better sense of its popularity.

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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

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What have hedge funds been doing with Imperva Inc (NYSE:IMPV)?

At Q3’s end, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a gain of 57% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards IMPV over the last 5 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

IMPV Chart

According to Insider Monkey’s hedge fund database, Elliott Management, led by Paul Singer, holds the most valuable position in Imperva Inc (NYSE:IMPV). Elliott Management has a $126.7 million position in the stock, comprising 1% of its 13F portfolio. Sitting at the No. 2 spot is Litespeed Management, led by Jamie Zimmerman, which holds a $50.7 million position; the fund has 20.2% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism include Ken Griffin’s Citadel Investment Group, Philippe Laffont’s Coatue Management, Kenneth Squire’s 13D Management. We should note that none of these hedge funds 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.

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