The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Palantir Technologies Inc. (NYSE:PLTR).
Is PLTR a good stock to buy? The smart money was taking an optimistic view. The number of bullish hedge fund bets rose by 31 recently. Palantir Technologies Inc. (NYSE:PLTR) was in 31 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that PLTR 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.
Today there are dozens of indicators investors put to use to analyze their stock investments. A pair of the less utilized indicators are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the best money managers can beat the S&P 500 by a superb margin (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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. With all of this in mind let’s take a look at the recent hedge fund action encompassing Palantir Technologies Inc. (NYSE:PLTR).
Do Hedge Funds Think PLTR Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 31 from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards PLTR over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Palantir Technologies Inc. (NYSE:PLTR) was held by Point72 Asset Management, which reported holding $284.1 million worth of stock at the end of September. It was followed by Soros Fund Management with a $175.3 million position. Other investors bullish on the company included Discovery Capital Management, Anchorage Advisors, and Third Point. In terms of the portfolio weights assigned to each position Discovery Capital Management allocated the biggest weight to Palantir Technologies Inc. (NYSE:PLTR), around 6.66% of its 13F portfolio. AltraVue Capital is also relatively very bullish on the stock, setting aside 5.01 percent of its 13F equity portfolio to PLTR.
Consequently, key money managers have jumped into Palantir Technologies Inc. (NYSE:PLTR) headfirst. Point72 Asset Management, managed by Steve Cohen, initiated the largest position in Palantir Technologies Inc. (NYSE:PLTR). Point72 Asset Management had $284.1 million invested in the company at the end of the quarter. George Soros’s Soros Fund Management also made a $175.3 million investment in the stock during the quarter. The following funds were also among the new PLTR investors: Rob Citrone’s Discovery Capital Management, Kevin Michael Ulrich and Anthony Davis’s Anchorage Advisors, and Dan Loeb’s Third Point.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Palantir Technologies Inc. (NYSE:PLTR) but similarly valued. We will take a look at Rollins, Inc. (NYSE:ROL), Discover Financial Services (NYSE:DFS), Valero Energy Corporation (NYSE:VLO), Coca-Cola European Partners plc (NYSE:CCEP), CMS Energy Corporation (NYSE:CMS), CGI Inc. (NYSE:GIB), and Conagra Brands, Inc. (NYSE:CAG). This group of stocks’ market valuations are similar to PLTR’s market valuation.
|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 31.6 hedge funds with bullish positions and the average amount invested in these stocks was $547 million. That figure was $643 million in PLTR’s case. Discover Financial Services (NYSE:DFS) is the most popular stock in this table. On the other hand CGI Inc. (NYSE:GIB) is the least popular one with only 20 bullish hedge fund positions. Palantir Technologies Inc. (NYSE:PLTR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PLTR is 42.6. 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 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 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. A small number of hedge funds were also right about betting on PLTR as the stock returned 173.4% since the end of the third quarter (through 12/18) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.