Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Qualys Inc (QLYS) A Good Stock To Buy ?

Looking for stocks with high upside potential? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 13.1% in the 2.5 months of 2019 (including dividend payments). Conversely, hedge funds’ 15 preferred S&P 500 stocks generated a return of 19.7% during the same period, with 93% of these stock picks outperforming the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely. Our research covering the last 18 years indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like Qualys Inc (NASDAQ:QLYS).

Qualys Inc (NASDAQ:QLYS) was in 17 hedge funds’ portfolios at the end of December. QLYS investors should pay attention to a decrease in support from the world’s most elite money managers lately. There were 18 hedge funds in our database with QLYS holdings at the end of the previous quarter. Our calculations also showed that QLYS isn’t among the 30 most popular stocks among hedge funds.

At the moment there are a multitude of gauges investors have at their disposal to evaluate stocks. Two of the best gauges are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can outclass the market by a significant margin (see the details here).

NAVELLIER & ASSOCIATES

Let’s analyze the fresh hedge fund action encompassing Qualys Inc (NASDAQ:QLYS).

Hedge fund activity in Qualys Inc (NASDAQ:QLYS)

At Q4’s end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards QLYS over the last 14 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

QLYS_apr2019

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Panayotis Takis Sparaggis’s Alkeon Capital Management has the biggest position in Qualys Inc (NASDAQ:QLYS), worth close to $67.5 million, amounting to 0.4% of its total 13F portfolio. The second most bullish fund manager is Jim Simons of Renaissance Technologies, with a $65.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions comprise Cliff Asness’s AQR Capital Management, Joel Greenblatt’s Gotham Asset Management and Israel Englander’s Millennium Management.

Judging by the fact that Qualys Inc (NASDAQ:QLYS) has experienced declining sentiment from the aggregate hedge fund industry, logic holds that there were a few fund managers that slashed their full holdings in the third quarter. Intriguingly, D. E. Shaw’s D E Shaw cut the biggest position of the 700 funds monitored by Insider Monkey, worth about $3.6 million in stock, and Phil Frohlich’s Prescott Group Capital Management was right behind this move, as the fund said goodbye to about $2 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Qualys Inc (NASDAQ:QLYS) but similarly valued. We will take a look at Sabra Health Care REIT Inc (NASDAQ:SBRA), Newfield Exploration Co. (NYSE:NFX), Bank OZK (NASDAQ:OZK), and Physicians Realty Trust (NYSE:DOC). This group of stocks’ market valuations resemble QLYS’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SBRA 15 82224 6
NFX 34 330966 -5
OZK 18 216630 8
DOC 12 93423 3
Average 19.75 180811 3

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $181 million. That figure was $180 million in QLYS’s case. Newfield Exploration Co. (NYSE:NFX) is the most popular stock in this table. On the other hand Physicians Realty Trust (NYSE:DOC) is the least popular one with only 12 bullish hedge fund positions. Qualys Inc (NASDAQ:QLYS) is not the least popular stock in this group but hedge fund interest is still below average. 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately QLYS wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); QLYS investors were disappointed as the stock returned 10.7% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading...