Should I Buy Cloudera, Inc. (CLDR)?

As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Cloudera, Inc. (NYSE:CLDR).

Cloudera, Inc. (NYSE:CLDR) was in 30 hedge funds’ portfolios at the end of March. The all time high for this statistic is 33. CLDR investors should be aware of an increase in enthusiasm from smart money of late. There were 29 hedge funds in our database with CLDR holdings at the end of December. Our calculations also showed that CLDR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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Peter Rathjens of Arrowstreet Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we’re going to take a glance at the latest hedge fund action encompassing Cloudera, Inc. (NYSE:CLDR).

Do Hedge Funds Think CLDR Is A Good Stock To Buy Now?

At the end of March, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards CLDR over the last 23 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

Is CLDR A Good Stock To Buy?

The largest stake in Cloudera, Inc. (NYSE:CLDR) was held by Icahn Capital LP, which reported holding $636.8 million worth of stock at the end of December. It was followed by RGM Capital with a $109 million position. Other investors bullish on the company included Renaissance Technologies, Arrowstreet Capital, and Citadel Investment Group. In terms of the portfolio weights assigned to each position VIEX Capital Advisors allocated the biggest weight to Cloudera, Inc. (NYSE:CLDR), around 6.1% of its 13F portfolio. RGM Capital is also relatively very bullish on the stock, earmarking 4.77 percent of its 13F equity portfolio to CLDR.

As aggregate interest increased, key hedge funds were breaking ground themselves. VIEX Capital Advisors, managed by Eric Singer, created the largest position in Cloudera, Inc. (NYSE:CLDR). VIEX Capital Advisors had $8.2 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $7 million investment in the stock during the quarter. The following funds were also among the new CLDR investors: Dmitry Balyasny’s Balyasny Asset Management, Matthew Hulsizer’s PEAK6 Capital Management, and Michel Massoud’s Melqart Asset Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Cloudera, Inc. (NYSE:CLDR) but similarly valued. We will take a look at PotlatchDeltic Corporation (NASDAQ:PCH), Equitrans Midstream Corporation (NYSE:ETRN), Applied Industrial Technologies Inc (NYSE:AIT), Diodes Incorporated (NASDAQ:DIOD), SPS Commerce, Inc. (NASDAQ:SPSC), Bed Bath & Beyond Inc. (NASDAQ:BBBY), and Cronos Group Inc. (NASDAQ:CRON). All of these stocks’ market caps resemble CLDR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PCH 26 152275 3
ETRN 28 361643 3
AIT 21 67909 0
DIOD 21 161053 7
SPSC 20 133241 6
BBBY 23 314226 -10
CRON 10 126181 -1
Average 21.3 188075 1.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $188 million. That figure was $866 million in CLDR’s case. Equitrans Midstream Corporation (NYSE:ETRN) is the most popular stock in this table. On the other hand Cronos Group Inc. (NASDAQ:CRON) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Cloudera, Inc. (NYSE:CLDR) is more popular among hedge funds. Our overall hedge fund sentiment score for CLDR is 83.3. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 22.8% in 2021 through July 2nd but still managed to beat the market by 6 percentage points. Hedge funds were also right about betting on CLDR as the stock returned 30.2% since the end of March (through 7/2) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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