Is Splunk (SPLK) a Good Stock to Buy Now?
Miller Value Partners recently released its Q2 2021 Letter to Investors, a copy of which you can download here. The Miller Opportunity Trust Class I gained 4.18%, underperforming its benchmark, the S&P 500 Index, which returned 8.55% in the same quarter. You should check out the Top 5 Miller Value Partners Stock Picks Investors Can Buy Right Now, which could be the biggest winners this year.
In the Q2 2021 letter to investors, the fund highlighted a few stocks and Splunk Inc (NASDAQ: SPLK) is one of them. Splunk Inc (NASDAQ: SPLK) is a software publisher. Over the past three months, Splunk Inc (NASDAQ: SPLK) stock has gained 6%. Here’s what the fund says:
“Our biggest new position is Splunk Inc. ($ 138,373 SPLK). Splunk is one of our favorite types of opportunities: a well-positioned, secular company that faces short-term business pressures. We believe there is an opportunity for profit as the business normalizes and then builds capital beyond that SPLK is one of the leading providers of security software, a growing market due to the explosion of cyberthreats.
Splunk is in the midst of a multi-year business model transition that has negatively impacted finances and increased uncertainty. We believe we are finally past the worst of the transition with bottomed out revenues in fiscal 2020. We expect the company to return to positive free cash flow generation in the second half of this year. .
SPLK is trading at half the multiple of comparables. We believe this gap will close as the market is confident that the transition is working. The stock recently jumped on the news that Silver Lake, an excellent tech investor, has invested $ 1 billion in a senior convertible note and the company announced a $ 1 billion repurchase authorization. We believe the stock is worth much more than its former high (~ $ 2,204) creating significant upside potential for patients patient enough to hold on through the transition. “
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In August, we published an article revealing that Splunk Inc (NASDAQ: SPLK) was one of 5 stocks that Cathie Wood is doubling over.
In the first quarter of 2021, the number of bull hedge fund positions in Splunk Inc (NASDAQ: SPLK) stock declined by around 13% from the previous quarter (see chart here), so a number other hedge fund managers don’t believe in SPLK. growth potential. Our calculations showed that Splunk Inc (NASDAQ: SPLK) is not ranked among the top 30 most popular stocks among hedge funds.
The 10 largest stocks among hedge funds returned 231.2% between 2015 and 2020 and outperformed S&P 500 Index ETFs by more than 126 percentage points. We know it sounds amazing. You rejected our articles on major hedge fund stocks mainly because other media provided you with biased information about poor performance of hedge funds. You could have doubled the size of your nest egg by investing in the best hedge fund stocks instead of stupid S&P 500 ETFs. Here you can watch our video on the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: none. This article originally appeared on Insider Monkey.