The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider MongoDB, Inc. (NASDAQ:MDB) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is MongoDB, Inc. (NASDAQ:MDB) a buy, sell, or hold? Hedge funds were turning bullish. The number of bullish hedge fund positions rose by 10 lately. MongoDB, Inc. (NASDAQ:MDB) was in 46 hedge funds' portfolios at the end of March. The all time high for this statistic was 42. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that MDB isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 36 hedge funds in our database with MDB holdings at the end of December.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Alex Sacerdote of Whale Rock Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation, which is why we are checking out this inflation play. We go through lists like 10 best gold stocks to buy to identify promising stocks. 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 we're going to take a gander at the recent hedge fund action encompassing MongoDB, Inc. (NASDAQ:MDB).
Do Hedge Funds Think MDB Is A Good Stock To Buy Now?
At first quarter's end, a total of 46 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 28% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MDB over the last 23 quarters. With hedgies' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Alex Sacerdote's Whale Rock Capital Management has the largest position in MongoDB, Inc. (NASDAQ:MDB), worth close to $338.3 million, corresponding to 2.8% of its total 13F portfolio. Sitting at the No. 2 spot is Eashwar Krishnan of Tybourne Capital Management, with a $198.2 million position; 4.4% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions encompass Amish Mehta's SQN Investors, Ken Griffin's Citadel Investment Group and D. E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position Kuvari Partners allocated the biggest weight to MongoDB, Inc. (NASDAQ:MDB), around 20.64% of its 13F portfolio. SQN Investors is also relatively very bullish on the stock, earmarking 7.8 percent of its 13F equity portfolio to MDB.
Now, specific money managers have jumped into MongoDB, Inc. (NASDAQ:MDB) headfirst. Renaissance Technologies, established the most outsized position in MongoDB, Inc. (NASDAQ:MDB). Renaissance Technologies had $62.8 million invested in the company at the end of the quarter. Vikram Kumar's Kuvari Partners also made a $21.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew Hulsizer's PEAK6 Capital Management, David Atterbury's Whetstone Capital Advisors, and Kevin Cottrell and Chris LaSusa's KCL Capital.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as MongoDB, Inc. (NASDAQ:MDB) but similarly valued. These stocks are Principal Financial Group Inc (NASDAQ:PFG), Fomento Económico Mexicano, S.A.B. de C.V. (NYSE:FMX), Steris Plc (NYSE:STE), Varian Medical Systems, Inc. (NYSE:VAR), Gartner Inc (NYSE:IT), NetApp Inc. (NASDAQ:NTAP), and Monolithic Power Systems, Inc. (NASDAQ:MPWR). This group of stocks' market valuations are closest to MDB's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PFG,31,208237,5 FMX,15,845908,1 STE,30,1473753,-6 VAR,40,2286942,-9 IT,40,1737049,3 NTAP,26,317433,-8 MPWR,32,531499,2 Average,30.6,1057260,-1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.6 hedge funds with bullish positions and the average amount invested in these stocks was $1057 million. That figure was $1541 million in MDB's case. Varian Medical Systems, Inc. (NYSE:VAR) is the most popular stock in this table. On the other hand Fomento Económico Mexicano, S.A.B. de C.V. (NYSE:FMX) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks MongoDB, Inc. (NASDAQ:MDB) is more popular among hedge funds. Our overall hedge fund sentiment score for MDB is 90. 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 returned 17.4% in 2021 through June 18th but still managed to beat the market by 6.1 percentage points. Hedge funds were also right about betting on MDB as the stock returned 43.6% since the end of March (through 6/18) 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.