The Shifts in Cadian Capital Management's 13F Holdings for Q3 and Q4 2022

Investment management is a dynamic and ever-changing field, and Cadian Capital Management, LP is one of the leading players in this arena. As investors, Cadian Capital Management is renowned for its ability to identify opportunities early and make sound investments that pay off over the long term. In Q3 and Q4 2022, the fund went through significant changes, as evidenced by their latest 13F filings. In this blog post, we'll analyze the holdings of the fund to understand what changed and what we can learn from it.

Overview of Cadian Capital Management

Before diving into the analysis, it's essential to understand a little bit about Cadian Capital Management. The fund was established in 2012 by Eric Bannasch, a former protégé of legendary investor Julian Robertson. Since then, Cadian has established itself as one of the top hedge funds, with over $10 billion in assets under management. The fund is known for its concentration of positions, with a typical portfolio holding only 10-15 stocks. This is in stark contrast to more diversified investment strategies.

Analyzing the Holdings

Now, let's dive in and analyze the holdings of Cadian Capital Management in Q3 and Q4 2022. The 13F filings reveal some interesting insights into the fund's investment decisions.

The biggest change in the fund's holdings was the reduction of their stake in Palo Alto Networks Inc (PANW). The fund sold 43.6% of its shares, reducing the number of holdings from 1515866 to 1084976 shares. This also resulted in the value of their holdings dropping by 39%. This might suggest that the fund has lost faith in PANW or maybe that they needed capital for a different investment opportunity.

On the other hand, Cadian Capital Management increased its investment in Hubspot Inc (HUBS) by a massive 75.1%. In Q3, the fund held 277950 shares in HUBS, but by Q4, it had increased its holdings to 454603 shares. This also resulted in the value of its holdings increasing from $75080 to $131439. This shows a lot of confidence in HUBS's potential growth and could signal that Cadian believes that the stock is undervalued.

Another interesting development was Cadian's exit from various stocks entirely. There were 17 stocks that Cadian held in Q3 that were entirely liquidated by Q4. Companies like Blueprint Medicines Corp (BPMC), Microsoft Corp (MSFT), and Ultragenyx Pharmaceutical Inc (RARE) were all sold entirely by the fund. This could mean that Cadian saw better investment opportunities elsewhere or that it wanted to cash in on some of its profitable investments.

Conclusion

In conclusion, the 13F filings of Cadian Capital Management reveal a lot about the investment decisions made by the fund in Q3 and Q4 2022. The fund reduced its holdings in PANW but increased its investment in HUBS, suggesting that Cadian sees better growth potential in the latter. Additionally, the fund liquidated its positions in several stocks completely, indicating Cadian's willingness to invest in newer and potentially more profitable opportunities. While hedge funds' strategies are closely guarded secrets, analyzing 13F filings can provide insights into the minds of experienced investors like Cadian Capital Management.