Is ServiceNow Inc (NOW) A Good Stock To Buy?

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Because ServiceNow Inc (NYSE:NOW) has witnessed flat interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of fund managers who sold off their full holdings heading into Q4. At the top of the heap, John Burbank’s Passport Capital sold off the biggest position of all the hedgies watched by Insider Monkey, worth about $16.6 million in stock. Jim Simons’ fund, Renaissance Technologies, also dropped its stock, about $7.9 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as ServiceNow Inc (NYSE:NOW) but similarly valued. We will take a look at AMETEK, Inc. (NYSE:AME), Regions Financial Corporation (NYSE:RF), Dover Corp (NYSE:DOV), and AEGON N.V. (ADR) (NYSE:AEG). This group of stocks’ market valuations are similar to NOW’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AME 29 1054365 4
RF 34 823572 -5
DOV 28 827780 6
AEG 8 11293 4

As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $679 million. That figure was $982 million in NOW’s case. Regions Financial Corporation (NYSE:RF) is the most popular stock in this table. On the other hand AEGON N.V. (ADR) (NYSE:AEG) is the least popular one with only 8 bullish hedge fund positions. ServiceNow Inc (NYSE:NOW) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard RF might be a better candidate to consider a long position in.

Disclosure: None

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