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Hedge Funds Nibbling On Resonant Inc. (RESN)

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Resonant Inc. (NASDAQ:RESN) based on those filings.

Resonant Inc. (NASDAQ:RESN) was in 4 hedge funds’ portfolios at the end of the first quarter of 2020. RESN has experienced an increase in activity from the world’s largest hedge funds lately. There were 2 hedge funds in our database with RESN holdings at the end of the previous quarter. Our calculations also showed that RESN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: 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 monthly stock picks returned 87% since March 2017 and outperformed the S&P 500 ETFs by more than 51 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.

William Graves Boardman Bay Capital

William Graves of Boardman Bay Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to view the new hedge fund action surrounding Resonant Inc. (NASDAQ:RESN).

What have hedge funds been doing with Resonant Inc. (NASDAQ:RESN)?

Heading into the second quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from the previous quarter. By comparison, 1 hedge funds held shares or bullish call options in RESN a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Boardman Bay Capital Management, managed by Will Graves, holds the largest position in Resonant Inc. (NASDAQ:RESN). Boardman Bay Capital Management has a $0.5 million position in the stock, comprising 0.5% of its 13F portfolio. The second most bullish fund manager is Millennium Management, led by Israel Englander, holding a $0.1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors with similar optimism consist of David Harding’s Winton Capital Management, Michael Gelband’s ExodusPoint Capital and . In terms of the portfolio weights assigned to each position Boardman Bay Capital Management allocated the biggest weight to Resonant Inc. (NASDAQ:RESN), around 0.49% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, designating 0.002 percent of its 13F equity portfolio to RESN.

As aggregate interest increased, specific money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, assembled the most outsized position in Resonant Inc. (NASDAQ:RESN). Millennium Management had $0.1 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $0 million position during the quarter.

Let’s also examine hedge fund activity in other stocks similar to Resonant Inc. (NASDAQ:RESN). These stocks are MVC Capital, Inc. (NYSE:MVC), BiondVax Pharmaceuticals Ltd. (NASDAQ:BVXV), USD Partners LP (NYSE:USDP), and BG Staffing Inc (NYSE:BGSF). This group of stocks’ market valuations are closest to RESN’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MVC 9 21421 0
BVXV 1 163 0
USDP 2 485 0
BGSF 6 3047 -2
Average 4.5 6279 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 4.5 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $1 million in RESN’s case. MVC Capital, Inc. (NYSE:MVC) is the most popular stock in this table. On the other hand BiondVax Pharmaceuticals Ltd. (NASDAQ:BVXV) is the least popular one with only 1 bullish hedge fund positions. Resonant Inc. (NASDAQ:RESN) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on RESN as the stock returned 50.7% during the second quarter and outperformed the market by an even larger margin.

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