A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on IBEX Limited (NASDAQ:IBEX).
Is IBEX Limited (NASDAQ:IBEX) going to take off soon? Money managers were getting more optimistic. The number of bullish hedge fund positions moved up by 5 in recent months. IBEX Limited (NASDAQ:IBEX) was in 5 hedge funds’ portfolios at the end of September. Our calculations also showed that IBEX isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we’re going to take a peek at the latest hedge fund action encompassing IBEX Limited (NASDAQ:IBEX).
Hedge fund activity in IBEX Limited (NASDAQ:IBEX)
At third quarter’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5 from the previous quarter. The graph below displays the number of hedge funds with bullish position in IBEX over the last 21 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Brandon Haley’s Holocene Advisors has the number one position in IBEX Limited (NASDAQ:IBEX), worth close to $8.5 million, corresponding to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Chuck Royce of Royce & Associates, with a $5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism include Israel Englander’s Millennium Management, Michael Gelband’s ExodusPoint Capital and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors. In terms of the portfolio weights assigned to each position Holocene Advisors allocated the biggest weight to IBEX Limited (NASDAQ:IBEX), around 0.06% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, dishing out 0.05 percent of its 13F equity portfolio to IBEX.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Holocene Advisors, managed by Brandon Haley, created the largest position in IBEX Limited (NASDAQ:IBEX). Holocene Advisors had $8.5 million invested in the company at the end of the quarter. Chuck Royce’s Royce & Associates also initiated a $5 million position during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Michael Gelband’s ExodusPoint Capital, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.
Let’s now take a look at hedge fund activity in other stocks similar to IBEX Limited (NASDAQ:IBEX). We will take a look at Hebron Technology Co., Ltd. (NASDAQ:HEBT), Tidewater Inc. (NYSE:TDW), Pluristem Therapeutics Inc. (NASDAQ:PSTI), Leju Holdings Ltd (NYSE:LEJU), Cresud Sociedad Anonima Comercial, Inmobiliaria, Financiera y Agropecuaria (NASDAQ:CRESY), Oil-Dri Corporation of America (NYSE:ODC), and Hamilton Beach Brands Holding Company (NYSE:HBB). This group of stocks’ market caps resemble IBEX’s market cap.
|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 4.6 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $20 million in IBEX’s case. Hamilton Beach Brands Holding Company (NYSE:HBB) is the most popular stock in this table. On the other hand Hebron Technology Co., Ltd. (NASDAQ:HEBT) is the least popular one with only 1 bullish hedge fund positions. IBEX Limited (NASDAQ:IBEX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IBEX is 55.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. Hedge funds were also right about betting on IBEX as the stock returned 30% since the end of Q3 (through 11/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.