Were Hedge Funds Right About Atlassian Corporation Plc (TEAM)?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Atlassian Corporation Plc (NASDAQ:TEAM) in this article.

Atlassian Corporation Plc (NASDAQ:TEAM) was in 67 hedge funds’ portfolios at the end of March. The all time high for this statistic is 69. TEAM has seen a decrease in enthusiasm from smart money lately. There were 69 hedge funds in our database with TEAM holdings at the end of December. Our calculations also showed that TEAM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the financial world there are a multitude of signals stock traders use to grade stocks. Some of the most innovative signals are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the elite investment managers can outpace the S&P 500 by a superb margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

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 let’s take a look at the new hedge fund action encompassing Atlassian Corporation Plc (NASDAQ:TEAM).

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

Heading into the second quarter of 2021, a total of 67 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 TEAM over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Atlassian Corporation Plc (NASDAQ:TEAM) was held by Renaissance Technologies, which reported holding $704.2 million worth of stock at the end of December. It was followed by Lone Pine Capital with a $626.9 million position. Other investors bullish on the company included Tiger Global Management LLC, Melvin Capital Management, and Foxhaven Asset Management. In terms of the portfolio weights assigned to each position Strategy Capital allocated the biggest weight to Atlassian Corporation Plc (NASDAQ:TEAM), around 14.15% of its 13F portfolio. Foxhaven Asset Management is also relatively very bullish on the stock, earmarking 6.47 percent of its 13F equity portfolio to TEAM.

Seeing as Atlassian Corporation Plc (NASDAQ:TEAM) has faced falling interest from the smart money, we can see that there was a specific group of hedge funds that elected to cut their positions entirely by the end of the first quarter. It’s worth mentioning that Daniel Sundheim’s D1 Capital Partners sold off the largest stake of the 750 funds tracked by Insider Monkey, valued at an estimated $124 million in stock. Ryan Caldwell’s fund, Chiron Investment Management, also said goodbye to its stock, about $14.8 million worth. These moves are important to note, as total hedge fund interest fell by 2 funds by the end of the first quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Atlassian Corporation Plc (NASDAQ:TEAM) but similarly valued. These stocks are Southern Copper Corporation (NYSE:SCCO), The Blackstone Group Inc. (NYSE:BX), Moderna, Inc. (NASDAQ:MRNA), Edwards Lifesciences Corporation (NYSE:EW), Honda Motor Co Ltd (NYSE:HMC), Vodafone Group Plc (NASDAQ:VOD), and Aon plc (NYSE:AON). This group of stocks’ market valuations resemble TEAM’s market valuation.

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As you can see these stocks had an average of 36 hedge funds with bullish positions and the average amount invested in these stocks was $2042 million. That figure was $3956 million in TEAM’s case. Aon plc (NYSE:AON) is the most popular stock in this table. On the other hand Honda Motor Co Ltd (NYSE:HMC) is the least popular one with only 12 bullish hedge fund positions. Atlassian Corporation Plc (NASDAQ:TEAM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TEAM is 78. 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 25.8% in 2021 through August 6th and still beat the market by 6.7 percentage points. Hedge funds were also right about betting on TEAM as the stock returned 58.7% since the end of Q1 (through 8/6) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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