Is salesforce.com inc. (CRM) A Good Stock To Buy?

Keith Weiss, a software analyst at Morgan Stanley, recently reiterated his positive views on salesforce.com inc. (NYSE:CRM) after going through the presentation of one salesforce executive, who participated in the Morgan Stanley Technology, Media & Telecom conference at the end of February 2016. The analyst said that customer demand for applications continues to remain quite strong and salesforce is well-positioned to make the most of this development:

“Having built a robust set of solutions around marketing to, acquiring, and servicing customers, Salesforce.com represents the best positioned name in our group for this trend. Top line growth has been bolstered by a more strategic selling motion implemented by Keith Block, as well as a quickly expanding partner ecosystem developing new functionality on top Salesforce.com’s Platform – as seen in the 28% YoY billings growth in the recent FY4Q16. These points, coupled with a solid framework for continued margin expansion, which CFO Mark Hawkins again spoke to at the conference, leads to sustainable 30%+ FCF growth ahead for CRM, in our view.”

How are hedge funds trading salesforce.com inc. (NYSE:CRM)?

Heading into 2016, a total of 61 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 9% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Ken Griffin’s Citadel Investment Group has the most valuable position in salesforce.com inc. (NYSE:CRM), worth close to $222.6 million, accounting for 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Criterion Capital, led by Christopher Lord, holding a $211.7 million position; 6.6% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism consist of Frank Slattery’s Symmetry Peak Management, Israel Englander’s Millennium Management and James Dondero’s Highland Capital Management.

Now, key hedge funds were breaking ground themselves. OZ Management, managed by Daniel S. Och, assembled the most valuable call position in salesforce.com inc. (NYSE:CRM). OZ Management had $93 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $43 million position during the quarter. The following funds were also among the new CRM investors: Sheetal Duggal’s Thrax Management, Solomon Kumin’s Folger Hill Asset Management, and Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital.

The final page of this article covers the Q4 hedge fund activity in several other companies with market capitalizations similar to the one of salesforce.com inc. (NYSE:CRM).