Hedge funds are not perfect. They have their bad picks just like everyone else. Micron, a stock hedge funds have loved, lost 50% during the last 12 months ending in October 30. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% in the same time period, vs. a gain of 5.2% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Marin Software Inc (NYSE:MRIN).
Marin Software Inc (NYSE:MRIN) has seen an increase in hedge fund interest recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Morgans Hotel Group Co. (NASDAQ:MHGC), Roundy’s Inc (NYSE:RNDY), and Cherry Hill Mortgage Investment Corp (NYSE:CHMI) to gather more data points.
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Now, let’s analyze the new action regarding Marin Software Inc (NYSE:MRIN).
How have hedgies been trading Marin Software Inc (NYSE:MRIN)?
At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the second quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Crosslink Capital, managed by Seymour Sy Kaufman and Michael Stark, holds the largest position in Marin Software Inc (NYSE:MRIN). Crosslink Capital has a $4.2 million position in the stock, comprising 0.6% of its 13F portfolio. Coming in second is Raging Capital Management, led by William C. Martin, holding a $3.3 million position; 0.4% of its 13F portfolio is allocated to the stock. Some other members of the smart money that are bullish include Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management and D E Shaw.
With a general bullishness amongst the heavyweights, key money managers have jumped into Marin Software Inc (NYSE:MRIN) headfirst. Raging Capital Management, managed by William C. Martin, created the biggest position in Marin Software Inc (NYSE:MRIN). Raging Capital Management had $3.3 million invested in the company at the end of the quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Marin Software Inc (NYSE:MRIN) but similarly valued. We will take a look at Morgans Hotel Group Co. (NASDAQ:MHGC), Roundy’s Inc (NYSE:RNDY), Cherry Hill Mortgage Investment Corp (NYSE:CHMI), and Envivio Inc (NASDAQ:ENVI). This group of stocks’ market caps are closest to MRIN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MHGC | 18 | 29484 | -2 |
| RNDY | 6 | 4757 | -5 |
| CHMI | 6 | 10611 | -1 |
| ENVI | 7 | 21324 | 2 |
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $9 million in MRIN’s case. Morgans Hotel Group Co. (NASDAQ:MHGC) is the most popular stock in this table. On the other hand Roundy’s Inc (NYSE:RNDY) is the least popular one with only 6 bullish hedge fund positions. Marin Software Inc (NYSE:MRIN) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MHGC might be a better candidate to consider a long position.
