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

Since ServiceNow Inc (NYSE:NOW) has witnessed falling interest from the smart money, it’s easy to see that there lies a certain “tier” of money managers that decided to sell off their full holdings last quarter. It’s worth mentioning that Frank Slattery’s Symmetry Peak Management said goodbye to the largest investment of the 700 funds watched by Insider Monkey, comprising about $4.7 million in stock, and Millennium Management Subsidiary’s Green Arrow Capital Management was right behind this move, as the fund dumped about $1.3 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 4 funds last quarter.

Let’s also examine 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 Signet Jewelers Ltd. (NYSE:SIG), Continental Resources, Inc. (NYSE:CLR), Rockwell Collins, Inc. (NYSE:COL), and D.R. Horton, Inc. (NYSE:DHI). This group of stocks’ market valuations match NOW’s market valuation.

As you can see these stocks had an average of 34.5 hedge funds with bullish positions and the average amount invested in these stocks was $1,271 million. That figure was $617 million in NOW’s case. Signet Jewelers Ltd. (NYSE:SIG) is the most popular stock in this table. On the other hand Rockwell Collins, Inc. (NYSE:COL) is the least popular one with only 17 bullish hedge fund positions. ServiceNow Inc (NYSE:NOW) 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. In this regard SIG might be a better candidate to consider a long position.