World-class money managers like Bill Ackman and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Constant Contact Inc (NASDAQ:CTCT) shareholders have witnessed an increase in activity from the world’s largest hedge funds lately. At the end of this article we will also compare CTCT to other stocks, including Innophos Holdings, Inc. (NASDAQ:IPHS), Saia Inc (NASDAQ:SAIA), and Atento SA (NYSE:ATTO) to get a better sense of its popularity.
Follow Constant Contact Inc. (NASDAQ:CTCT)
Follow Constant Contact Inc. (NASDAQ:CTCT)
In today’s marketplace, there are plenty of signals stock traders put to use to value stocks. A pair of the less utilized signals are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the top fund managers can outpace the broader indices by a significant amount (see the details here).
Now, we’re going to review the key action encompassing Constant Contact Inc (NASDAQ:CTCT).
How are hedge funds trading Constant Contact Inc (NASDAQ:CTCT)?
Heading into Q4, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Daruma Asset Management, managed by Mariko Gordon, holds the number one position in Constant Contact Inc (NASDAQ:CTCT). Daruma Asset Management has a $55.8 million position in the stock, comprising 3.4% of its 13F portfolio. The second largest stake is held by RGM Capital, led by Robert G. Moses, holding a $45.9 million position; 6.1% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism contain Jim Simons’ Renaissance Technologies, Jeffrey Jacobowitz’s Simcoe Capital Management and Paul Marshall and Ian Wace’s Marshall Wace LLP.
As one would reasonably expect, some big names were breaking ground themselves. G2 Investment Partners Management, managed by Josh Goldberg, assembled the most valuable call position in Constant Contact Inc (NASDAQ:CTCT). G2 Investment Partners Management had $1.9 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also initiated a $0.3 million position during the quarter. The other funds with new positions in the stock are Peter Muller’s PDT Partners and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Constant Contact Inc (NASDAQ:CTCT) but similarly valued. We will take a look at Innophos Holdings, Inc. (NASDAQ:IPHS), Saia Inc (NASDAQ:SAIA), Atento SA (NYSE:ATTO), and HMS Holdings Corp. (NASDAQ:HMSY). This group of stocks’ market valuations are closest to CTCT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IPHS | 22 | 68600 | 8 |
| SAIA | 20 | 162892 | 9 |
| ATTO | 5 | 28862 | -2 |
| HMSY | 25 | 85073 | 14 |
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $86 million. That figure was $134 million in CTCT’s case. HMS Holdings Corp. (NASDAQ:HMSY) is the most popular stock in this table. On the other hand Atento SA (NYSE:ATTO) is the least popular one with only 5 bullish hedge fund positions. Constant Contact Inc (NASDAQ:CTCT) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard HMSY might be a better candidate to consider for a potential investment.
