How do we determine whether LiveRamp Holdings, Inc. (NYSE:RAMP) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
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 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to view the latest hedge fund action regarding LiveRamp Holdings, Inc. (NYSE:RAMP).
What does the smart money think about LiveRamp Holdings, Inc. (NYSE:RAMP)?
At Q1’s end, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 28% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in RAMP over the last 15 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Abrams Bison Investments held the most valuable stake in LiveRamp Holdings, Inc. (NYSE:RAMP), which was worth $115.3 million at the end of the first quarter. On the second spot was Citadel Investment Group which amassed $73.6 million worth of shares. Moreover, RGM Capital, Millennium Management, and Columbus Circle Investors were also bullish on LiveRamp Holdings, Inc. (NYSE:RAMP), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, some big names were leading the bulls’ herd. Columbus Circle Investors, managed by Principal Global Investors, established the most outsized position in LiveRamp Holdings, Inc. (NYSE:RAMP). Columbus Circle Investors had $14.8 million invested in the company at the end of the quarter. Benjamin Pass’s TOMS Capital also made a $9.6 million investment in the stock during the quarter. The other funds with brand new RAMP positions are Peter Muller’s PDT Partners, Frederick DiSanto’s Ancora Advisors, and Joel Greenblatt’s Gotham Asset Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as LiveRamp Holdings, Inc. (NYSE:RAMP) but similarly valued. These stocks are Bank OZK (NASDAQ:OZK), Enstar Group Ltd. (NASDAQ:ESGR), PBF Energy Inc (NYSE:PBF), and Evercore Inc. (NYSE:EVR). This group of stocks’ market values match RAMP’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.5 hedge funds with bullish positions and the average amount invested in these stocks was $323 million. That figure was $323 million in RAMP’s case. Evercore Inc. (NYSE:EVR) is the most popular stock in this table. On the other hand Enstar Group Ltd. (NASDAQ:ESGR) is the least popular one with only 11 bullish hedge fund positions. LiveRamp Holdings, Inc. (NYSE:RAMP) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately RAMP wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on RAMP were disappointed as the stock returned -4.6% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.