Is it smart to be bullish on Palo Alto Networks Inc (NYSE:PANW)?
In the financial world, there are many metrics shareholders can use to analyze stocks. A pair of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite money managers can outclass their index-focused peers by a healthy amount (see just how much).
Equally as useful, bullish insider trading activity is another way to analyze the marketplace. Just as you’d expect, there are plenty of motivations for a bullish insider to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this tactic if you know where to look (learn more here).
Keeping this in mind, we’re going to discuss the newest info about Palo Alto Networks Inc (NYSE:PANW).
How have hedgies been trading Palo Alto Networks Inc (NYSE:PANW)?
Heading into Q3, a total of 12 of the hedge funds we track held long positions in this stock, a change of -40% from the first quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes substantially.
When using filings from the hedgies we track, Christopher Lord’s Criterion Capital had the largest position in Palo Alto Networks Inc (NYSE:PANW), worth close to $152 million, accounting for 6.1% of its total 13F portfolio. Sitting at the No. 2 spot is Lee Ainslie of Maverick Capital, with a $108.1 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Ryan Frick and Oliver Evans’s Dorsal Capital Management, Scott Fine and Peter Richards’s Empire Capital Management and Dmitry Balyasny’s Balyasny Asset Management.
Due to the fact Palo Alto Networks Inc (NYSE:PANW) has faced bearish sentiment from upper-tier hedge fund managers, it’s easy to see that there exists a select few money managers who sold off their full holdings last quarter. At the top of the heap, Donald Chiboucis’s Columbus Circle Investors dropped the biggest position of the 450+ funds we monitor, totaling close to $29 million in stock, and Noam Gottesman of GLG Partners was right behind this move, as the fund dropped about $20.8 million worth. These transactions are important to note, as total hedge fund interest was cut by 8 funds last quarter.
What do corporate executives and insiders think about Palo Alto Networks Inc (NYSE:PANW)?
Legal insider trading, particularly when it’s bullish, is most useful when the company we’re looking at has seen transactions within the past six months. Over the latest half-year time frame, Palo Alto Networks Inc (NYSE:PANW) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to Palo Alto Networks Inc (NYSE:PANW). These stocks are Super Micro Computer, Inc. (NASDAQ:SMCI), Finisar Corporation (NASDAQ:FNSR), Juniper Networks, Inc. (NYSE:JNPR), Riverbed Technology, Inc. (NASDAQ:RVBD), and Aruba Networks, Inc. (NASDAQ:ARUN). All of these stocks are in the networking & communication devices industry and their market caps match PANW’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Super Micro Computer, Inc. (NASDAQ:SMCI) | 6 | 0 | 0 |
| Finisar Corporation (NASDAQ:FNSR) | 20 | 0 | 0 |
| Juniper Networks, Inc. (NYSE:JNPR) | 22 | 0 | 0 |
| Riverbed Technology, Inc. (NASDAQ:RVBD) | 19 | 0 | 0 |
| Aruba Networks, Inc. (NASDAQ:ARUN) | 19 | 0 | 0 |
Using the returns explained by Insider Monkey’s research, average investors must always pay attention to hedge fund and insider trading sentiment, and Palo Alto Networks Inc (NYSE:PANW) shareholders fit into this picture quite nicely.
