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How do we determine whether Adobe Systems Incorporated (NASDAQ:ADBE) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.).
Adobe Systems Incorporated (NASDAQ:ADBE) has seen an increase in support from the world's most elite money managers of late. Our calculations also showed that ADBE ranked 20th among the 30 most popular stocks among hedge funds. Overall hedge fund sentiment towards Adobe hit its all time high at the end of the first quarter. We observed this in two other stocks: Disney and Worldpay. Disney outperformed the market by 20 percentage points whereas Worldpay beat it by 8 points.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let's take a peek at the key hedge fund action regarding Adobe Systems Incorporated (NASDAQ:ADBE).
Hedge fund activity in Adobe Systems Incorporated (NASDAQ:ADBE)
At the end of the first quarter, a total of 86 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ADBE over the last 15 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Lone Pine Capital was the largest shareholder of Adobe Systems Incorporated (NASDAQ:ADBE), with a stake worth $1206.7 million reported as of the end of March. Trailing Lone Pine Capital was AQR Capital Management, which amassed a stake valued at $770.3 million. Egerton Capital Limited, Coatue Management, and Arrowstreet Capital were also very fond of the stock, giving the stock large weights in their portfolios.