Here’s What Hedge Funds Think About Splunk Inc (SPLK)


“Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn’t by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today’s darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn’t attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal,” said Vilas Fund in its Q1 investor letter. We aren’t sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. That’s why we believe it would be worthwhile to take a look at the hedge fund sentiment on Splunk Inc (NASDAQ:SPLK) in order to identify whether reputable and successful top money managers continue to believe in its potential.

Splunk Inc (NASDAQ:SPLK) has seen an increase in hedge fund sentiment recently. Our calculations also showed that splk isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are a multitude of metrics market participants employ to analyze stocks. Two of the most useful metrics are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the top hedge fund managers can outclass the S&P 500 by a very impressive margin (see the details here).

Hedge fund activity in Splunk Inc (NASDAQ:SPLK)

At Q1’s end, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 16% from one quarter earlier. On the other hand, there were a total of 36 hedge funds with a bullish position in SPLK a year ago. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

Among these funds, Two Sigma Advisors held the most valuable stake in Splunk Inc (NASDAQ:SPLK), which was worth $81.8 million at the end of the first quarter. On the second spot was Citadel Investment Group which amassed $48 million worth of shares. Moreover, Arrowstreet Capital, D E Shaw, and Polar Capital were also bullish on Splunk Inc (NASDAQ:SPLK), allocating a large percentage of their portfolios to this stock.

As one would reasonably expect, some big names have been driving this bullishness. Duquesne Capital, managed by Stanley Druckenmiller, created the most outsized position in Splunk Inc (NASDAQ:SPLK). Duquesne Capital had $14.4 million invested in the company at the end of the quarter. Louis Bacon’s Moore Global Investments also initiated a $11.8 million position during the quarter. The other funds with brand new SPLK positions are Joe DiMenna’s ZWEIG DIMENNA PARTNERS, Christopher James’s Partner Fund Management, and Leon Shaulov’s Maplelane Capital.

Let’s also examine hedge fund activity in other stocks similar to Splunk Inc (NASDAQ:SPLK). These stocks are Freeport-McMoRan Inc. (NYSE:FCX), Cerner Corporation (NASDAQ:CERN), International Paper Company (NYSE:IP), and Liberty Global plc (NASDAQ:LBTYA). All of these stocks’ market caps match SPLK’s market cap.


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