Tenable Holdings, Inc. (TENB) Fell Out Of Favor With Hedge Funds

The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, 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 Tenable Holdings, Inc. (NASDAQ:TENB).

Is Tenable Holdings, Inc. (NASDAQ:TENB) undervalued? Money managers were taking a bearish view. The number of long hedge fund positions were trimmed by 7 lately. Tenable Holdings, Inc. (NASDAQ:TENB) was in 32 hedge funds’ portfolios at the end of March. The all time high for this statistic is 39. Our calculations also showed that TENB isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Robert Moses RGM Capital

Robert G. Moses of RGM 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. Keeping this in mind we’re going to analyze the fresh hedge fund action surrounding Tenable Holdings, Inc. (NASDAQ:TENB).

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

At Q1’s end, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TENB over the last 23 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Robert G. Moses’s RGM Capital has the largest position in Tenable Holdings, Inc. (NASDAQ:TENB), worth close to $110.7 million, comprising 4.8% of its total 13F portfolio. The second most bullish fund manager is Bruce Emery of Greenvale Capital, with a $89.9 million position; 9.8% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that are bullish comprise Brian Ashford-Russell and Tim Woolley’s Polar Capital, D. E. Shaw’s D E Shaw and Mina Faltas’s Washington Harbour Partners. In terms of the portfolio weights assigned to each position Toronado Partners allocated the biggest weight to Tenable Holdings, Inc. (NASDAQ:TENB), around 10.77% of its 13F portfolio. Greenvale Capital is also relatively very bullish on the stock, setting aside 9.79 percent of its 13F equity portfolio to TENB.

Seeing as Tenable Holdings, Inc. (NASDAQ:TENB) has faced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few money managers that decided to sell off their entire stakes last quarter. At the top of the heap, Glen Kacher’s Light Street Capital dropped the largest stake of the “upper crust” of funds tracked by Insider Monkey, totaling an estimated $34.1 million in stock, and Josh Resnick’s Jericho Capital Asset Management was right behind this move, as the fund cut about $31 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 7 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Tenable Holdings, Inc. (NASDAQ:TENB) but similarly valued. We will take a look at Advantage Solutions Inc. (NASDAQ:ADV), Aerojet Rocketdyne Holdings Inc (NYSE:AJRD), GoHealth, Inc. (NASDAQ:GOCO), Kinsale Capital Group, Inc. (NASDAQ:KNSL), Olo Inc. (NYSE:OLO), Safehold Inc. (NYSE:SAFE), and Physicians Realty Trust (NYSE:DOC). This group of stocks’ market caps are similar to TENB’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ADV 24 605969 5
AJRD 30 786292 -6
GOCO 17 549530 -1
KNSL 17 49810 0
OLO 21 85960 21
SAFE 8 7714 -1
DOC 19 119409 4
Average 19.4 314955 3.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.4 hedge funds with bullish positions and the average amount invested in these stocks was $315 million. That figure was $533 million in TENB’s case. Aerojet Rocketdyne Holdings Inc (NYSE:AJRD) is the most popular stock in this table. On the other hand Safehold Inc. (NYSE:SAFE) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Tenable Holdings, Inc. (NASDAQ:TENB) is more popular among hedge funds. Our overall hedge fund sentiment score for TENB is 72.6. 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 gained 22.8% in 2021 through July 2nd and still managed to beat the market by 6 percentage points. Hedge funds were also right about betting on TENB, though not to the same extent, as the stock returned 12.1% since the end of March (through July 2nd) and outperformed the market as well.

Follow Tenable Holdings Inc. (NASDAQ:TENB)

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