Here is What Hedge Funds Think About Check Point Software Technologies Ltd. (CHKP)

Abigail Fisher

We at Insider Monkey have gone over 752 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article, we look at what those funds think of Check Point Software Technologies Ltd. (NASDAQ:CHKP) based on that data.

Check Point Software Technologies Ltd. (NASDAQ:CHKP) was in 20 hedge funds' portfolios at the end of the third quarter of 2019. CHKP shareholders have witnessed a decrease in hedge fund interest in recent months. There were 24 hedge funds in our database with CHKP positions at the end of the previous quarter. Our calculations also showed that CHKP isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

5 Most Popular Stocks Among Hedge Funds

According to most market participants, hedge funds are viewed as worthless, old financial tools of yesteryear. While there are greater than 8000 funds trading at the moment, Our experts look at the bigwigs of this club, around 750 funds. Most estimates calculate that this group of people control the majority of all hedge funds' total asset base, and by tracking their finest investments, Insider Monkey has unsheathed several investment strategies that have historically defeated Mr. Market. Insider Monkey's flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per annum since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .

[caption id="attachment_255014" align="aligncenter" width="450"] Clint Carlson of Carlson Capital[/caption]

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. We're going to take a gander at the new hedge fund action surrounding Check Point Software Technologies Ltd. (NASDAQ:CHKP).

Hedge fund activity in Check Point Software Technologies Ltd. (NASDAQ:CHKP)

Heading into the fourth quarter of 2019, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from one quarter earlier. On the other hand, there were a total of 26 hedge funds with a bullish position in CHKP 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.

When looking at the institutional investors followed by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the number one position in Check Point Software Technologies Ltd. (NASDAQ:CHKP). Arrowstreet Capital has a $136.5 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund manager is Carlson Capital, managed by Clint Carlson, which holds a $49.8 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Noam Gottesman's GLG Partners, David E. Shaw's D E Shaw and John Overdeck and David Siegel's Two Sigma Advisors. In terms of the portfolio weights assigned to each position Sirios Capital Management allocated the biggest weight to Check Point Software Technologies Ltd. (NASDAQ:CHKP), around 1.24% of its 13F portfolio. Carlson Capital is also relatively very bullish on the stock, setting aside 0.9 percent of its 13F equity portfolio to CHKP.

Since Check Point Software Technologies Ltd. (NASDAQ:CHKP) has experienced declining sentiment from the entirety of the hedge funds we track, logic holds that there was a specific group of funds that decided to sell off their full holdings last quarter. At the top of the heap, Anand Parekh's Alyeska Investment Group cut the biggest position of the "upper crust" of funds monitored by Insider Monkey, valued at close to $111.8 million in stock, and Steve Cohen's Point72 Asset Management was right behind this move, as the fund sold off about $30.8 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 4 funds last quarter.

Let's now review hedge fund activity in other stocks similar to Check Point Software Technologies Ltd. (NASDAQ:CHKP). These stocks are Arthur J. Gallagher & Co. (NYSE:AJG), Magna International Inc. (NYSE:MGA), Marvell Technology Group Ltd. (NASDAQ:MRVL), and Credicorp Ltd. (NYSE:BAP). This group of stocks' market valuations match CHKP's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AJG,23,286963,-2 MGA,17,432332,3 MRVL,31,682428,-6 BAP,22,655780,2 Average,23.25,514376,-0.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.25 hedge funds with bullish positions and the average amount invested in these stocks was $514 million. That figure was $408 million in CHKP's case. Marvell Technology Group Ltd. (NASDAQ:MRVL) is the most popular stock in this table. On the other hand Magna International Inc. (NYSE:MGA) is the least popular one with only 17 bullish hedge fund positions. Check Point Software Technologies Ltd. (NASDAQ:CHKP) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on CHKP, though not to the same extent, as the stock returned 7.7% during the first two months of the fourth quarter and outperformed the market.

Disclosure: None. This article was originally published at Insider Monkey.

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