Do Hedge Funds Love Digital Turbine Inc (APPS)?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Digital Turbine Inc (NASDAQ:APPS).

Digital Turbine Inc (NASDAQ:APPS) was in 22 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 23. APPS investors should pay attention to a decrease in hedge fund interest recently. There were 23 hedge funds in our database with APPS holdings at the end of December. Our calculations also showed that APPS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In today’s marketplace there are dozens of methods shareholders put to use to size up stocks. A couple of the less utilized methods are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can beat their index-focused peers by a very impressive amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a peek at the key hedge fund action regarding Digital Turbine Inc (NASDAQ:APPS).

Do Hedge Funds Think APPS Is A Good Stock To Buy Now?

At Q1’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in APPS over the last 23 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Digital Turbine Inc (NASDAQ:APPS) was held by D E Shaw, which reported holding $145.8 million worth of stock at the end of December. It was followed by Greenhaven Road Investment Management with a $72.3 million position. Other investors bullish on the company included Arrowstreet Capital, Driehaus Capital, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Greenhaven Road Investment Management allocated the biggest weight to Digital Turbine Inc (NASDAQ:APPS), around 16.13% of its 13F portfolio. P.A.W. CAPITAL PARTNERS is also relatively very bullish on the stock, dishing out 7.07 percent of its 13F equity portfolio to APPS.

Because Digital Turbine Inc (NASDAQ:APPS) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there was a specific group of money managers who were dropping their positions entirely in the first quarter. It’s worth mentioning that Renaissance Technologies sold off the biggest stake of the “upper crust” of funds monitored by Insider Monkey, valued at about $30.8 million in stock. Sheetal Sharma’s fund, Collaborative Holdings Management, also said goodbye to its stock, about $7.9 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 1 funds in the first quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Digital Turbine Inc (NASDAQ:APPS) but similarly valued. These stocks are Freshpet Inc (NASDAQ:FRPT), Marriott Vacations Worldwide Corporation (NYSE:VAC), II-VI, Inc. (NASDAQ:IIVI), Sealed Air Corporation (NYSE:SEE), TCF Financial Corporation (NYSE:TCF), Starwood Property Trust, Inc. (NYSE:STWD), and Royal Gold, Inc (NASDAQ:RGLD). This group of stocks’ market values are similar to APPS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FRPT 19 209522 -6
VAC 24 604062 3
IIVI 39 267417 13
SEE 27 765215 -5
TCF 13 398544 -1
STWD 10 176663 -3
RGLD 17 237026 -9
Average 21.3 379778 -1.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $380 million. That figure was $349 million in APPS’s case. II-VI, Inc. (NASDAQ:IIVI) is the most popular stock in this table. On the other hand Starwood Property Trust, Inc. (NYSE:STWD) is the least popular one with only 10 bullish hedge fund positions. Digital Turbine Inc (NASDAQ:APPS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for APPS is 53.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately APPS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on APPS were disappointed as the stock returned -25.8% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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