Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Five9 Inc (NASDAQ:FIVN).
Five9 Inc (NASDAQ:FIVN) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 45 hedge funds' portfolios at the end of June. Our calculations also showed that FIVN isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare FIVN to other stocks including CRISPR Therapeutics AG (NASDAQ:CRSP), Teck Resources Ltd (NYSE:TECK), and Iron Mountain Incorporated (NYSE:IRM) to get a better sense of its popularity.
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Charles Clough of Clough Capital Partners
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. Now let's take a look at the recent hedge fund action surrounding Five9 Inc (NASDAQ:FIVN).
Do Hedge Funds Think FIVN Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 45 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 44 hedge funds with a bullish position in FIVN a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Alkeon Capital Management, managed by Panayotis Takis Sparaggis, holds the number one position in Five9 Inc (NASDAQ:FIVN). Alkeon Capital Management has a $553.7 million position in the stock, comprising 0.8% of its 13F portfolio. The second largest stake is held by Whale Rock Capital Management, managed by Alex Sacerdote, which holds a $523.2 million position; 3.4% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that hold long positions comprise Amish Mehta's SQN Investors, Steve Cohen's Point72 Asset Management and Christopher Lyle's SCGE Management. In terms of the portfolio weights assigned to each position Calixto Global Investors allocated the biggest weight to Five9 Inc (NASDAQ:FIVN), around 11.52% of its 13F portfolio. SQN Investors is also relatively very bullish on the stock, setting aside 8.96 percent of its 13F equity portfolio to FIVN.
Judging by the fact that Five9 Inc (NASDAQ:FIVN) has witnessed bearish sentiment 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 positions entirely last quarter. At the top of the heap, Chuck Royce's Royce & Associates dumped the biggest investment of the "upper crust" of funds followed by Insider Monkey, totaling close to $6.7 million in stock. Sheetal Sharma's fund, Collaborative Holdings Management, also said goodbye to its stock, about $4.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to Five9 Inc (NASDAQ:FIVN). We will take a look at CRISPR Therapeutics AG (NASDAQ:CRSP), Teck Resources Ltd (NYSE:TECK), Iron Mountain Incorporated (NYSE:IRM), InterContinental Hotels Group PLC (NYSE:IHG), Black Knight, Inc. (NYSE:BKI), Ozon Holdings PLC (NASDAQ:OZON), and Dr. Reddy's Laboratories Limited (NYSE:RDY). This group of stocks' market values match FIVN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CRSP,34,1761605,7 TECK,40,1277433,10 IRM,25,81927,9 IHG,6,10475,-2 BKI,33,995228,-7 OZON,19,190660,2 RDY,11,188216,-1 Average,24,643649,2.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $644 million. That figure was $2151 million in FIVN's case. Teck Resources Ltd (NYSE:TECK) is the most popular stock in this table. On the other hand InterContinental Hotels Group PLC (NYSE:IHG) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Five9 Inc (NASDAQ:FIVN) is more popular among hedge funds. Our overall hedge fund sentiment score for FIVN is 83.7. 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 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. Unfortunately FIVN wasn't nearly as popular as these 5 stocks and hedge funds that were betting on FIVN were disappointed as the stock returned -8.8% since the end of the second quarter (through 10/1) 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 most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
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