Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Veeva Systems Inc (NYSE:VEEV) based on that data and determine whether they were really smart about the stock.
Hedge fund interest in Veeva Systems Inc (NYSE:VEEV) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that VEEV isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA), Datadog, Inc. (NASDAQ:DDOG), and Amphenol Corporation (NYSE:APH) to gather more data points.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Now we’re going to go over the fresh hedge fund action regarding Veeva Systems Inc (NYSE:VEEV).
Do Hedge Funds Think VEEV Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 44 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in VEEV over the last 25 quarters. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Among these funds, Arrowstreet Capital held the most valuable stake in Veeva Systems Inc (NYSE:VEEV), which was worth $282.8 million at the end of the third quarter. On the second spot was ARK Investment Management which amassed $212.1 million worth of shares. GLG Partners, Echo Street Capital Management, 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 Blue Whale Capital allocated the biggest weight to Veeva Systems Inc (NYSE:VEEV), around 5.74% of its 13F portfolio. 1623 Capital is also relatively very bullish on the stock, setting aside 3.88 percent of its 13F equity portfolio to VEEV.
Due to the fact that Veeva Systems Inc (NYSE:VEEV) has faced bearish sentiment from the smart money, it’s safe to say that there lies a certain “tier” of funds who were dropping their positions entirely in the third quarter. At the top of the heap, Brandon Haley’s Holocene Advisors dumped the largest stake of all the hedgies monitored by Insider Monkey, totaling an estimated $86.8 million in stock. Arthur B Cohen and Joseph Healey’s fund, Healthcor Management LP, also dumped its stock, about $42.3 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Veeva Systems Inc (NYSE:VEEV) but similarly valued. These stocks are Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA), Datadog, Inc. (NASDAQ:DDOG), Amphenol Corporation (NYSE:APH), Lloyds Banking Group PLC (NYSE:LYG), Barclays PLC (NYSE:BCS), Match Group, Inc. (NASDAQ:MTCH), and Roblox Corporation (NYSE:RBLX). This group of stocks’ market caps are similar to VEEV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BBVA | 10 | 310429 | 1 |
| DDOG | 62 | 4934612 | 6 |
| APH | 26 | 897948 | -13 |
| LYG | 8 | 16143 | 0 |
| BCS | 12 | 105770 | 1 |
| MTCH | 56 | 2662829 | -7 |
| RBLX | 50 | 3575923 | 1 |
| Average | 32 | 1786236 | -1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $1786 million. That figure was $1632 million in VEEV’s case. Datadog, Inc. (NASDAQ:DDOG) is the most popular stock in this table. On the other hand Lloyds Banking Group PLC (NYSE:LYG) is the least popular one with only 8 bullish hedge fund positions. Veeva Systems Inc (NYSE:VEEV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VEEV is 68.3. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, VEEV wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on VEEV were disappointed as the stock returned -17.9% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
