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Asure Software Inc (ASUR): Hedge Funds In Wait-and-See Mode

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Asure Software Inc (NASDAQ:ASUR) based on those filings.

Asure Software Inc (NASDAQ:ASUR) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 9 hedge funds’ portfolios at the end of March. At the end of this article we will also compare ASUR to other stocks including Denbury Resources Inc. (NYSE:DNR), Pangaea Logistics Solutions, Ltd. (NASDAQ:PANL), and AcelRx Pharmaceuticals Inc (NASDAQ:ACRX) to get a better sense of its popularity.

Video: Watch our video about the top 5 most popular hedge fund stocks.

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 monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Chuck Royce

Chuck Royce of Royce & Associates

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to analyze the key hedge fund action surrounding Asure Software Inc (NASDAQ:ASUR).

How are hedge funds trading Asure Software Inc (NASDAQ:ASUR)?

Heading into the second quarter of 2020, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ASUR over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Asure Software Inc (NASDAQ:ASUR) was held by Private Capital Management, which reported holding $11.2 million worth of stock at the end of September. It was followed by Royce & Associates with a $2.1 million position. Other investors bullish on the company included Venator Capital Management, Skylands Capital, and P.A.W. CAPITAL PARTNERS. In terms of the portfolio weights assigned to each position Private Capital Management allocated the biggest weight to Asure Software Inc (NASDAQ:ASUR), around 3.51% of its 13F portfolio. Venator Capital Management is also relatively very bullish on the stock, earmarking 1.31 percent of its 13F equity portfolio to ASUR.

Because Asure Software Inc (NASDAQ:ASUR) has faced declining sentiment from the entirety of the hedge funds we track, we can see that there exists a select few fund managers who sold off their entire stakes by the end of the first quarter. Intriguingly, Michael Gelband’s ExodusPoint Capital said goodbye to the biggest stake of all the hedgies tracked by Insider Monkey, valued at about $0.3 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund cut about $0.1 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Asure Software Inc (NASDAQ:ASUR) but similarly valued. These stocks are Denbury Resources Inc. (NYSE:DNR), Pangaea Logistics Solutions, Ltd. (NASDAQ:PANL), AcelRx Pharmaceuticals Inc (NASDAQ:ACRX), and Bel Fuse, Inc. (NASDAQ:BELFA). This group of stocks’ market caps match ASUR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DNR 8 486 -4
PANL 2 59 0
ACRX 3 1008 -4
BELFA 4 2975 0
Average 4.25 1132 -2

View table here if you experience formatting issues.

As you can see these stocks had an average of 4.25 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $18 million in ASUR’s case. Denbury Resources Inc. (NYSE:DNR) is the most popular stock in this table. On the other hand Pangaea Logistics Solutions, Ltd. (NASDAQ:PANL) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Asure Software Inc (NASDAQ:ASUR) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. Unfortunately ASUR wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ASUR were disappointed as the stock returned 12.9% during the second quarter (through June 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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Disclosure: None. This article was originally published at Insider Monkey.