New Relic Inc (NEWR): Are Hedge Funds Right About This Stock?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors endured a torrid quarter, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards New Relic Inc (NYSE:NEWR).

New Relic Inc (NYSE:NEWR) investors should pay attention to an increase in hedge fund sentiment in recent months. NEWR was in 17 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with NEWR positions at the end of the previous quarter. At the end of this article we will also compare NEWR to other stocks including Dorman Products Inc. (NASDAQ:DORM), American Equity Investment Life Holding (NYSE:AEL), and GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) to get a better sense of its popularity.

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To most investors, hedge funds are assumed to be underperforming, outdated investment tools of the past. While there are more than 8000 funds with their doors open at the moment, Our researchers look at the aristocrats of this group, around 700 funds. These investment experts manage the majority of the smart money’s total capital, and by tailing their unrivaled equity investments, Insider Monkey has figured out various investment strategies that have historically exceeded Mr. Market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points a year for a decade in their back tests.

With all of this in mind, let’s check out the latest action regarding New Relic Inc (NYSE:NEWR).

Hedge fund activity in New Relic Inc (NYSE:NEWR)

At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 21% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Matrix Capital Management, managed by David Goel and Paul Ferri, holds the biggest position in New Relic Inc (NYSE:NEWR). According to its latest quarterly report, the fund has a $123.8 million position in the stock, comprising 5.7% of its 13F portfolio. On Matrix Capital Management’s heels is Passport Capital, led by John Burbank, holding a $36.2 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism include Michael R. Weisberg’s Crestwood Capital Management, Drew Cupps’s Cupps Capital Management and Alex Sacerdote’s Whale Rock Capital Management.