These Hedge Funds Made The Right Call On Talend (TLND)
In this article you are going to find out whether hedge funds think Talend S.A. (NASDAQ:TLND) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Talend S.A. (NASDAQ:TLND) was in 27 hedge funds' portfolios at the end of December. The all time high for this statistic is 32. TLND has seen a decrease in enthusiasm from smart money recently. There were 28 hedge funds in our database with TLND holdings at the end of September. Our calculations also showed that TLND isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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 website. Now we're going to take a peek at the latest hedge fund action surrounding Talend S.A. (NASDAQ:TLND).
Do Hedge Funds Think TLND Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the third quarter of 2020. On the other hand, there were a total of 24 hedge funds with a bullish position in TLND a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, 40 North Management was the largest shareholder of Talend S.A. (NASDAQ:TLND), with a stake worth $99.7 million reported as of the end of December. Trailing 40 North Management was Praesidium Investment Management Company, which amassed a stake valued at $79.2 million. Hawk Ridge Management, Light Street Capital, and Sunriver Management 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 Ararat Capital allocated the biggest weight to Talend S.A. (NASDAQ:TLND), around 8.79% of its 13F portfolio. Sunriver Management is also relatively very bullish on the stock, earmarking 7.61 percent of its 13F equity portfolio to TLND.
Since Talend S.A. (NASDAQ:TLND) has faced a decline in interest from the aggregate hedge fund industry, we can see that there were a few money managers who sold off their entire stakes by the end of the fourth quarter. At the top of the heap, Dmitry Balyasny's Balyasny Asset Management dumped the largest investment of the "upper crust" of funds tracked by Insider Monkey, totaling an estimated $14.3 million in stock, and Karthik Sarma's SRS Investment Management was right behind this move, as the fund sold off about $14.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 1 funds by the end of the fourth quarter.
Let's check out hedge fund activity in other stocks similar to Talend S.A. (NASDAQ:TLND). These stocks are The RMR Group Inc. (NASDAQ:RMR), LexinFintech Holdings Ltd. (NASDAQ:LX), Triumph Bancorp Inc (NASDAQ:TBK), Oric Pharmaceuticals, Inc. (NASDAQ:ORIC), Ferro Corporation (NYSE:FOE), Vasta Platform Limited (NASDAQ:VSTA), and Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA). This group of stocks' market values are closest to TLND's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RMR,17,101886,4 LX,8,7577,-2 TBK,12,139041,7 ORIC,14,369911,4 FOE,12,169118,-3 VSTA,8,26428,0 KNSA,19,172837,-1 Average,12.9,140971,1.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.9 hedge funds with bullish positions and the average amount invested in these stocks was $141 million. That figure was $601 million in TLND's case. Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA) is the most popular stock in this table. On the other hand LexinFintech Holdings Ltd. (NASDAQ:LX) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Talend S.A. (NASDAQ:TLND) is more popular among hedge funds. Our overall hedge fund sentiment score for TLND is 79.3. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 12.3% in 2021 through April 19th but still managed to beat the market by 0.9 percentage points. Hedge funds were also right about betting on TLND as the stock returned 66.8% since the end of December (through 4/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
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