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DocuSign Inc.’s (DOCU) stock displayed steady performance so far in 2020, with a solid rise that allowed it to effortlessly outperform the S&P 500, rising by approximately 151.7% over six months in comparison to the S&P 500’s loss of about 3.1%. It’s no surprise that DocuSign’s impressive value increase caused it to be added to the WhaleWisdom Heat Index 100 v2.0.

The worldwide provider of electronic signature solutions has faired quite well amidst economic volatility caused by the coronavirus pandemic. One likely factor for the stock’s strong performance is that its signature solutions are incredibly helpful for a variety of businesses and customers to move forward with signing contracts and agreements during a time of social distancing.

Hedge Funds Are Active

Both hedge funds and institutions were actively buying DocuSign’s stock in the first quarter, helping it to land on the WhaleWisdom Whale Index and further increase its aggregate share value. During the first quarter, the total 13F shares held by hedge funds increased to approximately 44.3 million, from about 42.9 million, an increase of almost 3.2%. Institutions also saw a rise, with an increase of roughly 0.5%, as institutional ownership increased to approximately 145 million from 144.4 million.

(WhaleWisdom)

Encouraging Forecasts

Analysts’ views and estimates for the company are quite favorable. Estimates are for DocuSign’s revenue to grow in fiscal 2021 by 35.1% to $1.32 billion. Meanwhile, the company’s earnings are forecast to grow by 54.3% to $0.48. Earnings are estimated to nearly triple by fiscal 2023 to $1.42 per share.

Wedbush Securities, Inc. remains bullish on the company, after DocuSign’s strong first quarter earnings. The firm referenced the stock’s value proposition around its core e-signature solution in the coronavirus environment is resonating with many businesses as the practice of working from home remains in place for the foreseeable future. Meanwhile, Oppenheimer & Co. Inc. views DocuSign as a core investment holding, giving it a $200 price target. Additionally, DocuSign jumped saw additional gains after the announcement that they would be added to the Nasdaq 100.

Bright Outlook Ahead

DocuSign is well-positioned to benefit from continued demand for its electronic signature solutions. Fiscal 2021 is off to a strong start with a robust performance in its first fiscal quarter ending April 20, 2020. With the continued potential for growth, the future looks bright for investors of this stock and the company regardless of how long the pandemic may or may not last.

Shopify, Inc. (SHOP) has seen upward momentum primarily so far in 2020, steadily outperforming the S&P 500 and rising by approximately 130.9% over the past six months, in stark comparison to the S&P 500’s loss of about 4.6%.

However, despite the stock’s continued rise, hedge funds were selling the equity in the first quarter. This e-commerce company consequentially saw a drop in its ranking on the WhaleWisdom Heatmap.

Hedge Funds Are Selling

Hedge funds were selling the stock in the first quarter, and Shopify fell to 39 from a prior ranking of 14 on the WhaleWisdom Heatmap. Of hedge funds, 30 created new positions, 37 added to existing stakes, 15 exited, and 57 reduced their holdings.

(WhaleWisdom)

Shopify has been fortunate to see strong price growth in recent months. Still, the company is not immune to the uncertainty of the coronavirus pandemic and its impact on the stock market, which is likely to play a part in hedge funds’ actions. During the quarter, the aggregate 13F shares held by hedge funds decreased to approximately 27.5 million from 29.8 million, a drop of about 7.7%. Institutions had a slightly more favorable view of Shopify, increasing their aggregate holdings by about 0.6%, to approximately 71.1 million from 70.7 million.

(WhaleWisdom)

Analysts’ Estimates Are Encouraging

Analysts’ consensus estimates for Shopify show overall faith in the long term outlook. Piper Sandler Companies lifted Shopify to an Overweight rating from Neutral, citing that the digital business is well-positioned for the future. Piper also noted that digital commerce penetration rates could double or triple post-pandemic. RBC Capital Markets has maintained its outperform rating and given the stock a price target of $1,000. While ratings vary among analysts, strong cases made by analysts such as Piper and RBC offer compelling reasons for the equity to rise further.

 

Favorable Outlook

While 2020 started reasonably well for Shopify, it is understandable why some hedge funds have sold. However, despite the turmoil and uncertainty brought along by the coronavirus pandemic, it is clear that many companies like Shopify have shown growth over the past few months. Weathering the pandemic is no easy feat, but Shopify appears to be thriving, at least in part due to its ability to recognize and adapt to changing consumer needs. It makes the company well-positioned to continue to benefit from the demand for digital e-commerce during and after the coronavirus pandemic.

Microsoft May Continue Its Upward Momentum

Posted on June 22nd, 2020

Microsoft Corp. (MSFT) has seen relatively steady demand and increasing value so far for 2020, with the stock rising by about 23.7%, a stunning performance when compared to the S&P 500’s loss of approximately 3.6%. Overall, analysts have been bullish on the stock, increasing their price targets.

Moving Up The Heatmap

Hedge funds were buying the stock in the first quarter, helping Microsoft to elevate itself on the WhaleWisdom HeatMap by rising to 11 from a previous ranking of 15. As an established provider of software products and services, Microsoft appears to have been minimally affected by the Coronavirus pandemic. In contrast, many other companies and industries have seen a negative impact. It is certainly understandable that Microsoft’s value would remain strong during a time when businesses have been driven to increase remote work and online collaboration dramatically. Educational institutions have been forced to implement remote learning, and even video games have garnered more attention as a variety of ages look for additional entertainment outlets within the safety of their homes.

(WhaleWisdom Heatmap)

Hedge Funds Are Active

Hedge funds were buying in the first quarter, as aggregate 13F shares increased to approximately 1.84 billion from around 1.76 billion, an increase of about 4.5%. In slight contrast, institutions saw a mild decrease of about 2.8%, with the aggregate 13F shares, held decreasing to approximately 5.3 billion from 5.5 billion. Overall, 79 hedge funds created new positions, 231 added to an existing one, 21 closed out their stakes, and 303 reduced their holdings.

(WhaleWisdom)

Favorable Forecasts

Microsoft’s business outlook for June 2020 is favorable, with analysts estimating revenue to grow by about 12.4% year over year growth. The company’s earnings are also encouraging, with earnings per share estimates of $5.69 for 2020, and expectations for future growth to span from about 9.1% to 21% over the next three fiscal years.

Analysts have a favorable outlook for the company, raising price targets. Wells Fargo & Co. recently lifted its twelve-month price target on Microsoft to $250. Baird & Co. is also positive on the company partly due to the big success of Microsoft Teams in facilitating remote collaboration.

Positive Outlook

2020 has begun well for Microsoft. To date, the company has weathered the Coronavirus storm and continued to support its customers as they adapt to a world with more remote focused business and interaction. With its financial track record and potential for growth, there’s an excellent opportunity for hedge funds and institutions to be rewarded.

Tesla, Inc. (TSLA) managed to maintain strong momentum for the first five months of 2020 and has steadily outperformed the S&P 500. Despite the Coronavirus pandemic causing disruptions on its production line, Tesla has fared well, seeing just a slight dip in March. Tesla continues to be a leader in environmentally friendly vehicles.

Strong Results

Overall, hedge funds were actively buying the stock in the first quarter, helping the electric vehicle and clean energy company to land on the WhaleWisdom Heat Map with a ranking of 27. Tesla rose by approximately 123.5% in comparison to the S&P 500’s loss of about 5.9% since the beginning of the year.

(WhaleWisdom)

Hedge Funds Are Active

Hedge funds were actively buying the stock in the first quarter, and aggregate 13F shares held by hedge funds increased to 28.6 million from 28.1 million, an increase of almost 2%. Of the hedge funds, 58 created new positions, 55 added to an existing holding, 32 exited, and 65 reduced their stake.

Institutions were not quite as faithful to the company, as overall, institutions decreased their aggregate holdings by nearly 4.1% to 93.6 million from 97.5 million.

(WhaleWisdom)

Mixed Estimates Despite Rising Demand in China

Analysts are bullish on Tesla and forecast strong growth in 2020, with revenue expected to increase by roughly 40%. The company’s 2020 earnings per share estimates are also strong, and are expected to rise to $3.78 per share from $0.20 per share in 2019. Analysts have a favorable outlook for the company, raising price targets. Rising demand in China for electric-powered performance vehicles has contributed to these positive outlooks. Wedbush Securities, Inc. raised their price target on Tesla to $1,000. Wedbush cited accelerating demand in China for the Model 3. Analysts are also looking ahead to a potentially game changing electric car battery developments from Tesla at Battery Day in June of 2020.

Goldman Sachs Group, Inc. lifted its outlook for 2020 automobile sales to -14.5% from -17.5%, with an additional expectation that global automobile sales will rise by 8.5% in 2021. However, Morgan Stanley downgraded Tesla, slashing its price target to $650 from $680 and moving the stock to an Underweight rating. Morgan Stanley points out the long-term risks in a post-Coronavirus world, including fewer powerful players in transportation and ongoing tensions between the United States and China.

Cautious Optimism

While 2020 has started off well for Tesla, it is understandable why analysts have had mixed forecast for the long-term. The continuing tensions between the United States and China and the negative economic impact of the Coronavirus cannot be ignored, however, neither can technological advances coming from Tesla. Tesla’s electric cars are anticipated to soon come close in price with internal combustion engine vehicles, a potential game changer for the automobile industry. With its potential for growth, it may be why hedge funds have been moving into the shares despite the broader stock market turmoil.

DexCom Starts the Year Strong

Posted on June 8th, 2020

DexCom Inc. (DXCM) had a reasonably strong start in 2020, outperforming the S&P 500 over the past five months, rising by approximately 66.6% in comparison to the S&P 500’s loss of about 1.14%. The strong start and investor demand have gotten the shares added to the WhaleWisdom WhaleIndex.

DexCom is a medical device company focused on the development, manufacturing, and distribution of glucose monitoring systems for diabetes management. The company has received positive attention from diabetes patients due to DexCom’s G6 continuous glucose monitoring (CGM) system.

Making the Index

Given DexCom’s impressive performance, it is not surprising that the stock was added to the WhaleWisdom WhaleIndex 100. DexCom has a presence in the healthcare sector, and its latest CGM has appeal for being able to pare to smart devices to send customers alerts and minimize the need for fingersticks. With a healthcare product of this nature, it’s understandable that even the uncertainty of our current stock market has had little impact on DexCom’s value.

 

(WhaleWisdom)

Institutions Sell, While Hedge Funds Acquire

Institutions overall were selling the stock, but volume was minimal. The number of aggregate 13F shares decreased by approximately 0.9% as of Q1 2020, to roughly 89.4 million from about 90.2 million just three months earlier. For comparison, hedge funds increased their total 13F shares by about 1.7%, up to 35.5 million from 34.9 million.

 

(WhaleWisdom)

Analysts Share Favorable Forecasts

Citigroup Global Markets, Inc.’s, increased DexCom’s price target to $440 from $361 and maintains a Buy rating on shares, recognizing that the demand for new technology in diabetes management is high. Piper Sandler raised their price target to $450 from $375, while keeping an Overweight rating on the shares.

DexCom has seen its earnings rise in recent years, and now analysts are forecasting a significant increase in year-over-year growth for 2020, rising 51.9% to $2.17 per share. Meanwhile, revenue is forecast to grow by over 22% in 2020 to $1.79 billion.

 

Promise Lies Ahead

While DexCom isn’t cheap, trading for 121 times 2021 earnings estimates, there continues to be strong demand for the shares. DexCom’s climb onto the WhaleWhisdom Index supports this demand and gives hope for a sustained move higher. However, it should be noted that the restrictions on non-essential healthcare services during the Coronavirus pandemic have had a slightly negative impact on the volume of new customers for DexCom, but this is viewed as temporary. DexCom appears to have positioned itself to continue forward momentum through and beyond the pandemic. Current investors will likely maintain their stakes in DexCom, with new investors to come.