Is PING A Good Stock To Buy Now?

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Ping Identity Holding Corp. (NYSE:PING).

Is PING a good stock to buy now? Ping Identity Holding Corp. (NYSE:PING) has seen a decrease in hedge fund interest recently. Ping Identity Holding Corp. (NYSE:PING) was in 11 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 18. Our calculations also showed that PING 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.

To most investors, hedge funds are perceived as underperforming, outdated investment tools of yesteryear. While there are greater than 8000 funds trading today, We look at the upper echelon of this group, about 850 funds. These money managers direct most of the smart money’s total capital, and by observing their first-class stock picks, Insider Monkey has brought to light numerous investment strategies that have historically surpassed the broader indices. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Julian Robertson of Tiger Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. Now let’s take a look at the recent hedge fund action regarding Ping Identity Holding Corp. (NYSE:PING).

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

Heading into the fourth quarter of 2020, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -27% from the previous quarter. On the other hand, there were a total of 18 hedge funds with a bullish position in PING a year ago. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Brian Ashford-Russell and Tim Woolley’s Polar Capital has the number one position in Ping Identity Holding Corp. (NYSE:PING), worth close to $59.2 million, comprising 0.4% of its total 13F portfolio. Coming in second is GLG Partners, managed by Noam Gottesman, which holds a $4.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions contain Matthew Hulsizer’s PEAK6 Capital Management, Paul Tudor Jones’s Tudor Investment Corp and Julian Robertson’s Tiger Management. In terms of the portfolio weights assigned to each position Polar Capital allocated the biggest weight to Ping Identity Holding Corp. (NYSE:PING), around 0.45% of its 13F portfolio. Tiger Management is also relatively very bullish on the stock, dishing out 0.43 percent of its 13F equity portfolio to PING.

Since Ping Identity Holding Corp. (NYSE:PING) has experienced declining sentiment from the smart money, it’s easy to see that there exists a select few money managers that elected to cut their full holdings in the third quarter. At the top of the heap, Michael Gelband’s ExodusPoint Capital dumped the biggest position of all the hedgies followed by Insider Monkey, totaling close to $9.9 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also said goodbye to its stock, about $6.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 4 funds in the third quarter.

Let’s check out hedge fund activity in other stocks similar to Ping Identity Holding Corp. (NYSE:PING). These stocks are Vaxcyte, Inc. (NASDAQ:PCVX), Vonage Holdings Corp. (NASDAQ:VG), Home Bancshares, Inc. (Conway, AR) (NASDAQ:HOMB), Brighthouse Financial, Inc. (NASDAQ:BHF), Acushnet Holdings Corp. (NYSE:GOLF), Option Care Health, Inc. (NASDAQ:OPCH), and Evertec Inc (NYSE:EVTC). This group of stocks’ market caps are closest to PING’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PCVX 10 473971 -2
VG 36 368753 6
HOMB 14 32750 0
BHF 26 296716 -8
GOLF 12 35383 1
OPCH 18 138384 7
EVTC 21 316649 3
Average 19.6 237515 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.6 hedge funds with bullish positions and the average amount invested in these stocks was $238 million. That figure was $73 million in PING’s case. Vonage Holdings Corp. (NASDAQ:VG) is the most popular stock in this table. On the other hand Vaxcyte, Inc. (NASDAQ:PCVX) is the least popular one with only 10 bullish hedge fund positions. Ping Identity Holding Corp. (NYSE:PING) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PING is 21.3. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 gained 32.9% in 2020 through December 8th and surpassed the market again by 16.2 percentage points. Unfortunately PING wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); PING investors were disappointed as the stock returned -16.4% since the end of September (through 12/8) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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