These Hedge Funds Had Impeccable Timing Buying Tenable Holdings, Inc. (TENB)

We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Tenable Holdings, Inc. (NASDAQ:TENB).

Tenable Holdings, Inc. (NASDAQ:TENB) was in 18 hedge funds’ portfolios at the end of September. TENB has experienced an increase in hedge fund interest in recent months. There were 17 hedge funds in our database with TENB holdings at the end of the previous quarter. Our calculations also showed that TENB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In the 21st century investor’s toolkit there are a lot of signals stock market investors can use to grade their stock investments. A couple of the most under-the-radar signals are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the best investment managers can outperform the market by a solid amount (see the details here).


Ken Griffin of Citadel Investment Group

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a look at the key hedge fund action encompassing Tenable Holdings, Inc. (NASDAQ:TENB).

How have hedgies been trading Tenable Holdings, Inc. (NASDAQ:TENB)?

Heading into the fourth quarter of 2019, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards TENB over the last 17 quarters. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

Among these funds, Sylebra Capital Management held the most valuable stake in Tenable Holdings, Inc. (NASDAQ:TENB), which was worth $61.1 million at the end of the third quarter. On the second spot was D E Shaw which amassed $18.6 million worth of shares. Greenvale Capital, Bloom Tree Partners, and Citadel 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 Greenvale Capital allocated the biggest weight to Tenable Holdings, Inc. (NASDAQ:TENB), around 4.82% of its 13F portfolio. Sylebra Capital Management is also relatively very bullish on the stock, earmarking 2.67 percent of its 13F equity portfolio to TENB.

As one would reasonably expect, some big names were leading the bulls’ herd. Greenvale Capital, managed by Bruce Emery, initiated the most outsized position in Tenable Holdings, Inc. (NASDAQ:TENB). Greenvale Capital had $16.1 million invested in the company at the end of the quarter. Alok Agrawal’s Bloom Tree Partners also initiated a $11.2 million position during the quarter. The other funds with brand new TENB positions are Andrew Kurita’s Kettle Hill Capital Management, Renaissance Technologies, and Charles Davidson and Joseph Jacobs’s Wexford Capital.

Let’s check out hedge fund activity in other stocks similar to Tenable Holdings, Inc. (NASDAQ:TENB). We will take a look at Cactus, Inc. (NYSE:WHD), Intercept Pharmaceuticals Inc (NASDAQ:ICPT), First Bancorp (NYSE:FBP), and PagerDuty, Inc. (NYSE:PD). This group of stocks’ market valuations match TENB’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WHD 18 160038 -6
ICPT 21 245421 -3
FBP 21 198063 -2
PD 11 15240 -11
Average 17.75 154691 -5.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $155 million. That figure was $136 million in TENB’s case. Intercept Pharmaceuticals Inc (NASDAQ:ICPT) is the most popular stock in this table. On the other hand PagerDuty, Inc. (NYSE:PD) is the least popular one with only 11 bullish hedge fund positions. Tenable Holdings, Inc. (NASDAQ:TENB) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on TENB as the stock returned 21.3% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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