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Hedge Funds Are Crazy About Bandwidth Inc. (BAND)

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Bandwidth Inc. (NASDAQ:BAND).

Bandwidth Inc. (NASDAQ:BAND) was in 16 hedge funds’ portfolios at the end of September. BAND has experienced an increase in support from the world’s most elite money managers in recent months. There were 12 hedge funds in our database with BAND holdings at the end of the previous quarter. Our calculations also showed that BAND isn’t among the 30 most popular stocks among hedge funds.

Today there are a multitude of metrics stock market investors employ to grade publicly traded companies. Two of the less utilized metrics are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the top investment managers can outperform the S&P 500 by a healthy margin (see the details here).

Richard Driehaus

Let’s go over the fresh hedge fund action regarding Bandwidth Inc. (NASDAQ:BAND).

How are hedge funds trading Bandwidth Inc. (NASDAQ:BAND)?

At Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in BAND over the last 13 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

BAND_dec2018

More specifically, Portolan Capital Management was the largest shareholder of Bandwidth Inc. (NASDAQ:BAND), with a stake worth $28.6 million reported as of the end of September. Trailing Portolan Capital Management was Renaissance Technologies, which amassed a stake valued at $16.8 million. Laurion Capital Management, Driehaus Capital, and Alta Park Capital were also very fond of the stock, giving the stock large weights in their portfolios.

As aggregate interest increased, key hedge funds have jumped into Bandwidth Inc. (NASDAQ:BAND) headfirst. Renaissance Technologies, managed by Jim Simons, established the largest position in Bandwidth Inc. (NASDAQ:BAND). Renaissance Technologies had $16.8 million invested in the company at the end of the quarter. Brian C. Freckmann’s Lyon Street Capital also made a $1.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Muller’s PDT Partners, Jeffrey Talpins’s Element Capital Management, and D. E. Shaw’s D E Shaw.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Bandwidth Inc. (NASDAQ:BAND) but similarly valued. These stocks are Himax Technologies, Inc. (NASDAQ:HIMX), Lattice Semiconductor Corporation (NASDAQ:LSCC), PetIQ, Inc. (NASDAQ:PETQ), and Super Micro Computer, Inc. (NASDAQ:SMCI). This group of stocks’ market caps are closest to BAND’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HIMX 10 29789 -4
LSCC 18 160900 5
PETQ 22 106182 9
SMCI 3 58886 -7
Average 13.25 88939 0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $89 million. That figure was $114 million in BAND’s case. PetIQ, Inc. (NASDAQ:PETQ) is the most popular stock in this table. On the other hand Super Micro Computer, Inc. (NASDAQ:SMCI) is the least popular one with only 3 bullish hedge fund positions. Bandwidth Inc. (NASDAQ:BAND) 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 PETQ might be a better candidate to consider a long position.

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

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