There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Immersion Corporation (NASDAQ:IMMR).
At the end of September, 14 funds from our database held shares of Immersion Corporation (NASDAQ:IMMR), but the company registered a decrease in support from the smart money investors last quarter. At the end of this article we will also compare IMMR to other stocks including Ardmore Shipping Corp (NYSE:ASC), Mobileiron Inc (NASDAQ:MOBL), and Datalink Corporation (NASDAQ:DTLK) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Now, we’re going to check out the fresh action surrounding Immersion Corporation (NASDAQ:IMMR).
Hedge fund activity in Immersion Corporation (NASDAQ:IMMR)
Heading into the fourth quarter of 2016, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, compared to 20 funds at the end of June. By comparison, 21 hedge funds held shares or bullish call options in IMMR heading into this year. So, let’s check out 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, Rima Senvest Management, led by Richard Mashaal, holds the number one position in Immersion Corporation (NASDAQ:IMMR). Rima Senvest Management has a $36.3 million position in the stock, comprising 2.6% of its 13F portfolio. The second most bullish fund manager is Spencer M. Waxman’s Shannon River Fund Management, led by , holding a $19.9 million position; the fund has 5.5% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism contain Christopher Zepf and Brian Thonn’s Kingdom Ridge Capital, and Chuck Royce’s Royce & Associates. We should note that Shannon River Fund Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually dropped their positions entirely. At the top of the heap, Panayotis Takis Sparaggis’ Alkeon Capital Management dropped the biggest position of the “upper crust” of funds monitored by Insider Monkey, comprising about $1.7 million in stock. Renaissance Technologies, one of the biggest hedge funds in the world, also cut its stock, about $1.2 million worth.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Immersion Corporation (NASDAQ:IMMR) but similarly valued. We will take a look at Ardmore Shipping Corp (NYSE:ASC), Mobileiron Inc (NASDAQ:MOBL), Datalink Corporation (NASDAQ:DTLK), and Tandem Diabetes Care Inc (NASDAQ:TNDM). All of these stocks’ market caps resemble IMMR’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $21 million, which is lower than the $102 million figure in IMMR’s case. Datalink Corporation (NASDAQ:DTLK) is the most popular stock in this table, while Ardmore Shipping Corp (NYSE:ASC) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Immersion Corporation (NASDAQ:IMMR) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.