It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Xactly Corp (NYSE:XTLY).
Xactly Corp (NYSE:XTLY) has experienced an increase in hedge fund sentiment in recent months. XTLY was in 13 hedge funds’ portfolios at the end of the third quarter of 2016. There were 12 hedge funds in our database with XTLY holdings at the end of the previous quarter. At the end of this article we will also compare XTLY to other stocks including Collegium Pharmaceutical Inc (NASDAQ:COLL), 21Vianet Group Inc (NASDAQ:VNET), and Del Taco Restaurants Inc (NASDAQ:TACO) 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.
With all of this in mind, let’s take a peek at the fresh action surrounding Xactly Corp (NYSE:XTLY).
How are hedge funds trading Xactly Corp (NYSE:XTLY)?
At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 8% from the second quarter of 2016. By comparison, 3 hedge funds held shares or bullish call options in XTLY heading into this year. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, George McCabe’s Portolan Capital Management has the number one position in Xactly Corp (NYSE:XTLY), worth close to $8.9 million, comprising 1.2% of its total 13F portfolio. The second largest stake is held by Marshall Wace LLP, led by Paul Marshall and Ian Wace, which oversees a $7.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions contain Renaissance Technologies, one of the largest hedge funds in the world, Richard Driehaus’s Driehaus Capital and John Overdeck and David Siegel’s Two Sigma Advisors. 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.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into Xactly Corp (NYSE:XTLY) headfirst. George McCabe’s Portolan Capital Management initiated the most valuable position in Xactly Corp (NYSE:XTLY). Josh Goldberg’s G2 Investment Partners Management also made a $1 million investment in the stock during the quarter. The other funds with brand new XTLY positions are Cliff Asness’s AQR Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Glenn Russell Dubin’s Highbridge Capital Management.
Let’s go over hedge fund activity in other stocks similar to Xactly Corp (NYSE:XTLY). We will take a look at Collegium Pharmaceutical Inc (NASDAQ:COLL), 21Vianet Group Inc (NASDAQ:VNET), Del Taco Restaurants Inc (NASDAQ:TACO), and KEYW Holding Corp. (NASDAQ:KEYW). All of these stocks’ market caps are closest to XTLY’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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 $59 million. That figure was $38 million in XTLY’s case. Del Taco Restaurants Inc (NASDAQ:TACO) is the most popular stock in this table. On the other hand 21Vianet Group Inc (NASDAQ:VNET) is the least popular one with only 9 bullish hedge fund positions. Xactly Corp (NYSE:XTLY) 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 TACO might be a better candidate to consider taking a long position in.