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Hedge Funds Piling Into AudioCodes Ltd. (AUDC)

We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like AudioCodes Ltd. (NASDAQ:AUDC).

AudioCodes Ltd. (NASDAQ:AUDC) investors should pay attention to an increase in hedge fund sentiment of late. Our calculations also showed that AUDC 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.

If you’d ask most stock holders, hedge funds are assumed to be worthless, old financial tools of years past. While there are over 8000 funds in operation at present, Our researchers choose to focus on the top tier of this group, about 750 funds. These money managers oversee most of the hedge fund industry’s total capital, and by watching their top picks, Insider Monkey has uncovered several investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .

NAVELLIER & ASSOCIATES

Louis Navellier of Navellier & Associates

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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 also rely on the best performing hedge funds‘ buy/sell signals. Let’s take a peek at the new hedge fund action surrounding AudioCodes Ltd. (NASDAQ:AUDC).

What does smart money think about AudioCodes Ltd. (NASDAQ:AUDC)?

At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AUDC over the last 17 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in AudioCodes Ltd. (NASDAQ:AUDC) was held by Arrowstreet Capital, which reported holding $7.1 million worth of stock at the end of September. It was followed by G2 Investment Partners Management with a $6.5 million position. Other investors bullish on the company included Navellier & Associates, D E Shaw, and Renaissance Technologies. In terms of the portfolio weights assigned to each position G2 Investment Partners Management allocated the biggest weight to AudioCodes Ltd. (NASDAQ:AUDC), around 1.86% of its 13F portfolio. Navellier & Associates is also relatively very bullish on the stock, setting aside 0.53 percent of its 13F equity portfolio to AUDC.

As aggregate interest increased, key money managers have jumped into AudioCodes Ltd. (NASDAQ:AUDC) headfirst. Citadel Investment Group, managed by Ken Griffin, assembled the most outsized call position in AudioCodes Ltd. (NASDAQ:AUDC). Citadel Investment Group had $4.6 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $1.1 million position during the quarter. The following funds were also among the new AUDC investors: Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as AudioCodes Ltd. (NASDAQ:AUDC) but similarly valued. We will take a look at EverQuote, Inc. (NASDAQ:EVER), i3 Verticals, Inc. (NASDAQ:IIIV), Endurance International Group Holdings Inc (NASDAQ:EIGI), and One Liberty Properties, Inc. (NYSE:OLP). This group of stocks’ market caps match AUDC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EVER 13 62810 2
IIIV 10 48762 -3
EIGI 13 80023 2
OLP 5 30386 1
Average 10.25 55495 0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $23 million in AUDC’s case. EverQuote, Inc. (NASDAQ:EVER) is the most popular stock in this table. On the other hand One Liberty Properties, Inc. (NYSE:OLP) is the least popular one with only 5 bullish hedge fund positions. AudioCodes Ltd. (NASDAQ:AUDC) is not the most popular stock in this group but hedge fund interest is still above 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. Hedge funds were also right about betting on AUDC as the stock returned 26.8% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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

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