After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Workday Inc (NASDAQ:WDAY).
Is Workday Inc (NASDAQ:WDAY) a good stock to buy now? WDAY was in 74 hedge funds’ portfolios at the end of September. The all time high for this statistics is 73. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. WDAY has seen an increase in enthusiasm from smart money lately. There were 73 hedge funds in our database with WDAY holdings at the end of June. Our calculations also showed that WDAY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a large number of tools investors use to evaluate stocks. A pair of the less known tools are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can trounce the market by a healthy margin (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets. Tesla’s stock price skyrocketed, yet lithium prices are still below their 2019 highs. So, we are checking out this lithium stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we’re going to view the recent hedge fund action surrounding Workday Inc (NASDAQ:WDAY).
What have hedge funds been doing with Workday Inc (NASDAQ:WDAY)?
At Q3’s end, a total of 74 of the hedge funds tracked by Insider Monkey were long this stock, a change of 1% from the second quarter of 2020. On the other hand, there were a total of 44 hedge funds with a bullish position in WDAY a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
Among these funds, Tiger Global Management LLC held the most valuable stake in Workday Inc (NASDAQ:WDAY), which was worth $797 million at the end of the third quarter. On the second spot was Bares Capital Management which amassed $592.7 million worth of shares. Holocene Advisors, Citadel Investment Group, and Viking Global were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Half Sky Capital allocated the biggest weight to Workday Inc (NASDAQ:WDAY), around 13.57% of its 13F portfolio. Bares Capital Management is also relatively very bullish on the stock, setting aside 12.51 percent of its 13F equity portfolio to WDAY.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Holocene Advisors, managed by Brandon Haley, initiated the most valuable position in Workday Inc (NASDAQ:WDAY). Holocene Advisors had $287.4 million invested in the company at the end of the quarter. Gabriel Plotkin’s Melvin Capital Management also initiated a $129.1 million position during the quarter. The other funds with brand new WDAY positions are Steve Cohen’s Point72 Asset Management, Baker Burleson and Stormy Scott’s Banbury Partners, and Ravee Mehta’s Nishkama Capital.
Let’s check out hedge fund activity in other stocks similar to Workday Inc (NASDAQ:WDAY). We will take a look at Newmont Corporation (NYSE:NEM), Autodesk, Inc. (NASDAQ:ADSK), Dell Technologies Inc. (NYSE:DELL), Kimberly Clark Corporation (NYSE:KMB), The Bank of Nova Scotia (NYSE:BNS), Barrick Gold Corporation (NYSE:GOLD), and Brookfield Asset Management Inc. (NYSE:BAM). This group of stocks’ market caps match WDAY’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 43.6 hedge funds with bullish positions and the average amount invested in these stocks was $2107 million. That figure was $4397 million in WDAY’s case. Autodesk, Inc. (NASDAQ:ADSK) is the most popular stock in this table. On the other hand The Bank of Nova Scotia (NYSE:BNS) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Workday Inc (NASDAQ:WDAY) is more popular among hedge funds. Our overall hedge fund sentiment score for WDAY is 86. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. Unfortunately WDAY wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on WDAY were disappointed as the stock returned 4.1% since the end of the third quarter (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.