Is ServiceNow Inc (NOW) Going to Burn These Hedge Funds?

Out of thousands of stocks that are currently traded on the market, it is difficult to determine those that can really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of over 700 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about ServiceNow Inc (NYSE:NOW).

ServiceNow Inc was in 26 hedge funds’ portfolios at the end of September. NOW investors should pay attention to a decrease in support from the world’s most elite money managers of late. There were 30 hedge funds in our database with NOW holdings at the end of the previous quarter. At the end of this article we will also compare NOW to other stocks including Signet Jewelers Ltd. (NYSE:SIG), Continental Resources, Inc. (NYSE:CLR), and Rockwell Collins, Inc. (NYSE:COL) to get a better sense of its popularity.

With all of this in mind, let’s take a look at the recent action surrounding ServiceNow Inc (NYSE:NOW).

What have hedge funds been doing with ServiceNow Inc (NYSE:NOW)?

Heading into Q4, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Criterion Capital, managed by Christopher Lord, holds the largest position in ServiceNow Inc (NYSE:NOW). Criterion Capital has a $194.8 million position in the stock, comprising 6.6% of its 13F portfolio. The second most bullish fund is Columbus Circle Investors, with a $163.6 million position; 1.3% of its 13F portfolio is allocated to the stock. Other members of the smart money with similar optimism include Christopher James’s Partner Fund Management, Robert Pitts’s Steadfast Capital Management and Matthew Hulsizer’s PEAK6 Capital Management.