Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors’ favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the 12-month period ending October 30. However, 63% of hedge funds’ top 30 stock picks from the index did beat the market, and returned nearly twice as much on average as the index. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.
Yodlee Inc (NASDAQ:YDLE) shareholders have witnessed an increase in hedge fund sentiment recently. Yodlee Inc (NASDAQ:YDLE) was in 12 hedge funds’ portfolios at the end of September. There were 9 hedge funds in our database with Yodlee Inc (NASDAQ:YDLE) holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as SPX Corporation (NYSE:SPXC), Scorpio Bulkers Inc (NYSE:SALT), and RealD (NYSE:RLD) to gather more data points.
Today there are numerous signals market participants have at their disposal to grade publicly traded companies. A duo of the most useful signals are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can trounce the S&P 500 by a very impressive margin (see the details here).
With all of this in mind, let’s take a look at the recent action encompassing Yodlee Inc (NASDAQ:YDLE).
Hedge fund activity in Yodlee Inc (NASDAQ:YDLE)
Heading into Q4, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 33% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s institutional investor database, Matthew Halbower’s Pentwater Capital Management has the biggest position in Yodlee Inc (NASDAQ:YDLE), worth close to $13.7 million, corresponding to 0.1% of its total 13F portfolio. Coming in second is Indaba Capital Management, led by Derek C. Schrier, holding an $11.9 million position; 3.9% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions contain Farallon Capital, Chase Coleman’s Tiger Global Management LLC, and Karthik Sarma’s SRS Investment Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Yodlee Inc (NASDAQ:YDLE) but similarly valued. We will take a look at SPX Corporation (NYSE:SPXC), Scorpio Bulkers Inc (NYSE:SALT), RealD (NYSE:RLD), and Northwest Biotherapeutics, Inc (NASDAQ:NWBO). This group of stock market values is similar to Yodlee Inc (NASDAQ:YDLE)’s market value.
|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 17 hedge funds with bullish positions and the average amount invested in these stocks was $153 million. That figure was $62 million in Yodlee Inc (NASDAQ:YDLE)’s case. SPX Corporation (NYSE:SPXC) is the most popular stock in this table. On the other hand, Northwest Biotherapeutics, Inc (NASDAQ:NWBO) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Yodlee Inc (NASDAQ:YDLE) is even less popular than Northwest Biotherapeutics, Inc (NASDAQ:NWBO). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.