Hedge Funds Are Buying Spok Holdings, Inc. (SPOK)

Does Spok Holdings, Inc. (NASDAQ:SPOK) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail unconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.

Spok Holdings, Inc. (NASDAQ:SPOK) was in 10 hedge funds’ portfolios at the end of September. SPOK shareholders have witnessed an increase in hedge fund sentiment in recent months. There were 8 hedge funds in our database with SPOK positions 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 Jive Software Inc (NASDAQ:JIVE), Powell Industries, Inc. (NASDAQ:POWL), and Bank Mutual Corporation (NASDAQ:BKMU) to gather more data points.

In the 21st century investor’s toolkit there are many signals shareholders put to use to analyze publicly traded companies. Two of the less known signals are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce the S&P 500 by a superb amount (see the details here).

Now, we’re going to take a peek at the latest action encompassing Spok Holdings, Inc. (NASDAQ:SPOK).

What have hedge funds been doing with Spok Holdings, Inc. (NASDAQ:SPOK)?

At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 25% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the largest position in Spok Holdings, Inc. (NASDAQ:SPOK). In its latest 13F filing, the fund has reported a $28.4 million position in the stock, comprising 0.1% of its 13F portfolio. On Renaissance Technologies’s heels is Two Sigma Advisors, managed by John Overdeck and David Siegel, which holds a $0.9 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish consist of Chuck Royce’s Royce & Associates, Israel Englander’s Millennium Management and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

With a general bullishness amongst the heavyweights, some big names have jumped into Spok Holdings, Inc. (NASDAQ:SPOK) headfirst. Algert Coldiron Investors, managed by Peter Algert and Kevin Coldiron, created the most outsized position in Spok Holdings, Inc. (NASDAQ:SPOK), worth an estimated $0.6 million at the end of the quarter. D. E. Shaw’s D E Shaw also made a $0.3 million investment in the stock during the quarter. The other funds with brand new SPOK positions are Peter Muller’s PDT Partners and Neil Chriss’s Hutchin Hill Capital.

Let’s go over hedge fund activity in other stocks similar to Spok Holdings, Inc. (NASDAQ:SPOK). These stocks are Jive Software Inc (NASDAQ:JIVE), Powell Industries, Inc. (NASDAQ:POWL), Bank Mutual Corporation (NASDAQ:BKMU), and One Liberty Properties, Inc. (NYSE:OLP). This group of stocks’ market valuations are closest to SPOK’s market valuation.

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $33 million in SPOK’s case. Jive Software Inc (NASDAQ:JIVE) is the most popular stock in this table. On the other hand One Liberty Properties, Inc. (NYSE:OLP) and Bank Mutual Corporation (NASDAQ:BKMU) are the laggards with only 6 bullish hedge fund positions eacg. Spok Holdings, Inc. (NASDAQ:SPOK) is not the most popular stock in this group, but hedge fund interest is still above average. Although this is a slightly positive signal, we’d rather spend our time researching stocks that hedge funds are piling on. In this regard JIVE might be a better candidate to consider a long position.