Should You Buy Acacia Research Corporation (ACTG)?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Acacia Research Corporation (NASDAQ:ACTG).

Is Acacia Research Corporation (NASDAQ:ACTG) a marvelous investment today? Investors who are in the know are really in an optimistic mood. The number of bullish hedge fund positions that are disclosed in regulatory 13F filings experienced an increase of 2 in recent months. In this way, there were 13 hedge funds in our database with ACTG positions at the end of the previous quarter. At the end of this article we will also compare ACTG to other stocks including pdvWireless Inc (NASDAQ:PDVW), Xcerra Corp (NASDAQ:XCRA), and Preferred Apartment Communities Inc. (NYSEAMEX:APTS) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Hedge fund activity in Acacia Research Corporation (NASDAQ:ACTG)

At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a jump of 18% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards ACTG over the last 5 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, John W. Rogers’ Ariel Investments has the number one position in Acacia Research Corporation (NASDAQ:ACTG), worth close to $22.2 million. Sitting at the No. 2 spot is Renaissance Technologies, one of the largest hedge funds in the world, holding a $19.5 million position. Some other members of the smart money that hold long positions include Mark Broach’s Manatuck Hill Partners, Chuck Royce’s Royce & Associates and Paul Marshall and Ian Wace’s Marshall Wace LLP. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As one would reasonably expect, key money managers were breaking ground themselves. Marshall Wace LLP created the most outsized position in Acacia Research Corporation (NASDAQ:ACTG). Marshall Wace LLP had $2.6 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also made a $1.8 million investment in the stock during the quarter. The other funds with brand new ACTG positions are Paul Tudor Jones’ Tudor Investment Corp and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Acacia Research Corporation (NASDAQ:ACTG) but similarly valued. We will take a look at pdvWireless Inc (NASDAQ:PDVW), Xcerra Corp (NASDAQ:XCRA), Preferred Apartment Communities Inc. (NYSEAMEX:APTS), and Sangamo Biosciences, Inc. (NASDAQ:SGMO). This group of stocks’ market caps match ACTG’s market cap.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $68 million. That figure was $56 million in ACTG’s case. Sangamo Biosciences, Inc. (NASDAQ:SGMO) is the most popular stock in this table. On the other hand pdvWireless Inc (NASDAQ:PDVW) is the least popular one with only 5 bullish hedge fund positions. Acacia Research Corporation (NASDAQ:ACTG) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SGMO might be a better candidate to consider taking a long position in.

Disclosure: None