Ping Identity Holding Corp. (PING): Are Hedge Funds Right About This Stock?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Ping Identity Holding Corp. (NYSE:PING) and determine whether the smart money was really smart about this stock.

Ping Identity Holding Corp. (NYSE:PING) was in 11 hedge funds’ portfolios at the end of the first quarter of 2020. PING has seen an increase in activity from the world’s largest hedge funds lately. There were 10 hedge funds in our database with PING positions at the end of the previous quarter. Our calculations also showed that PING isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Julian Robertson of Tiger Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a peek at the new hedge fund action regarding Ping Identity Holding Corp. (NYSE:PING).

What does smart money think about Ping Identity Holding Corp. (NYSE:PING)?

At the end of the first quarter, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PING over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Polar Capital was the largest shareholder of Ping Identity Holding Corp. (NYSE:PING), with a stake worth $31.4 million reported as of the end of September. Trailing Polar Capital was Harvard Management Co, which amassed a stake valued at $8.1 million. Citadel Investment Group, Holocene Advisors, and Alyeska Investment Group 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 Harvard Management Co allocated the biggest weight to Ping Identity Holding Corp. (NYSE:PING), around 1.27% of its 13F portfolio. Polar Capital is also relatively very bullish on the stock, setting aside 0.34 percent of its 13F equity portfolio to PING.

Now, specific money managers were breaking ground themselves. Harvard Management Co, managed by Rick Slocum, established the largest position in Ping Identity Holding Corp. (NYSE:PING). Harvard Management Co had $8.1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $3.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Sander Gerber’s Hudson Bay Capital Management, and Julian Robertson’s Tiger Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Ping Identity Holding Corp. (NYSE:PING) but similarly valued. We will take a look at WesBanco, Inc. (NASDAQ:WSBC), Noah Holdings Limited (NYSE:NOAH), Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD), and Focus Financial Partners Inc. (NASDAQ:FOCS). This group of stocks’ market caps are closest to PING’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WSBC 9 31703 -2
NOAH 14 320880 -1
IRWD 28 334818 0
FOCS 7 34941 -5
Average 14.5 180586 -2

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $181 million. That figure was $53 million in PING’s case. Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) is the most popular stock in this table. On the other hand Focus Financial Partners Inc. (NASDAQ:FOCS) is the least popular one with only 7 bullish hedge fund positions. Ping Identity Holding Corp. (NYSE:PING) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th and still beat the market by 15.5 percentage points. A small number of hedge funds were also right about betting on PING as the stock returned 60.3% during the second quarter and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.