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Hedge Funds Are Dumping J2 Global Inc (JCOM)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 752 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of J2 Global Inc (NASDAQ:JCOM).

J2 Global Inc (NASDAQ:JCOM) has seen a decrease in hedge fund interest recently. Our calculations also showed that JCOM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

FISHER ASSET MANAGEMENT

Ken Fisher of Fisher Asset Management

We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Now let’s go over the latest hedge fund action regarding J2 Global Inc (NASDAQ:JCOM).

What have hedge funds been doing with J2 Global Inc (NASDAQ:JCOM)?

Heading into the fourth quarter of 2019, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards JCOM over the last 17 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in J2 Global Inc (NASDAQ:JCOM) was held by AQR Capital Management, which reported holding $88.2 million worth of stock at the end of September. It was followed by Cardinal Capital with a $72.7 million position. Other investors bullish on the company included Fisher Asset Management, Royce & Associates, and D E Shaw. In terms of the portfolio weights assigned to each position Cardinal Capital allocated the biggest weight to J2 Global Inc (NASDAQ:JCOM), around 2.4% of its 13F portfolio. Portolan Capital Management is also relatively very bullish on the stock, setting aside 2.2 percent of its 13F equity portfolio to JCOM.

Since J2 Global Inc (NASDAQ:JCOM) has faced falling interest from hedge fund managers, we can see that there were a few hedgies that slashed their entire stakes by the end of the third quarter. At the top of the heap, Matthew Tewksbury’s Stevens Capital Management cut the biggest stake of the “upper crust” of funds followed by Insider Monkey, worth close to $3.4 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also cut its stock, about $3 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 6 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to J2 Global Inc (NASDAQ:JCOM). We will take a look at Spire Inc. (NYSE:SR), CVR Energy, Inc. (NYSE:CVI), Envista Holdings Corporation (NYSE:NVST), and The Boston Beer Company Inc (NYSE:SAM). This group of stocks’ market caps are similar to JCOM’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SR 13 80974 1
CVI 26 3273232 7
NVST 21 255475 21
SAM 29 661168 6
Average 22.25 1067712 8.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $1068 million. That figure was $281 million in JCOM’s case. The Boston Beer Company Inc (NYSE:SAM) is the most popular stock in this table. On the other hand Spire Inc. (NYSE:SR) is the least popular one with only 13 bullish hedge fund positions. J2 Global Inc (NASDAQ:JCOM) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on JCOM, though not to the same extent, as the stock returned 6.8% during the first two months of the fourth quarter and outperformed the market.

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

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