What Hedge Funds Tell Us About Splunk Inc (SPLK)

Seeing as Splunk Inc (NASDAQ:SPLK) has witnessed declining sentiment from the aggregate hedge fund industry, we can see that there is a sect of funds that slashed their positions entirely by the end of the third quarter. At the top of the heap, Vivek Mehta and Aaron Husock’s ShearLink Capital dropped the biggest position of the 700 funds monitored by Insider Monkey, valued at an estimated $18.4 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund cut about $13 million worth of shares. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Splunk Inc (NASDAQ:SPLK) but similarly valued. We will take a look at Alaska Air Group, Inc. (NYSE:ALK), Open Text Corporation (USA) (NASDAQ:OTEX), Western Gas Partners, LP (NYSE:WES), and ITC Holdings Corp. (NYSE:ITC). This group of stocks’ market caps are similar to SPLK’s market cap.

As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $747 million. That figure was $596 million in SPLK’s case. Alaska Air Group, Inc. (NYSE:ALK) is the most popular stock in this table. On the other hand Western Gas Partners, LP (NYSE:WES) is the least popular one with only 8 bullish hedge fund positions. Splunk Inc (NASDAQ:SPLK) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ALK or ITC might be better candidates to consider for long positions.

Disclosure: None