World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Is Willdan Group, Inc. (NASDAQ:WLDN) a first-rate investment now? Money managers are in a bearish mood. The number of bullish hedge fund positions were cut by 1 in recent months. Our calculations also showed that WLDN isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most market participants, hedge funds are perceived as unimportant, outdated investment vehicles of yesteryear. While there are over 8000 funds in operation today, Our experts choose to focus on the crème de la crème of this club, around 750 funds. These hedge fund managers oversee bulk of the hedge fund industry’s total capital, and by paying attention to their matchless investments, Insider Monkey has discovered several investment strategies that have historically outstripped the market. Insider Monkey’s flagship hedge fund strategy defeated the S&P 500 index by around 5 percentage points per annum since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to analyze the new hedge fund action surrounding Willdan Group, Inc. (NASDAQ:WLDN).
How are hedge funds trading Willdan Group, Inc. (NASDAQ:WLDN)?
Heading into the third quarter of 2019, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards WLDN over the last 16 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, Richard Driehaus’s Driehaus Capital has the biggest position in Willdan Group, Inc. (NASDAQ:WLDN), worth close to $8.5 million, comprising 0.3% of its total 13F portfolio. Coming in second is PDT Partners, led by Peter Muller, holding a $0.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism consist of Ken Griffin’s Citadel Investment Group, David Harding’s Winton Capital Management and Cliff Asness’s AQR Capital Management.
Judging by the fact that Willdan Group, Inc. (NASDAQ:WLDN) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there was a specific group of fund managers that slashed their full holdings in the second quarter. Interestingly, Renaissance Technologies sold off the biggest stake of all the hedgies watched by Insider Monkey, valued at about $1.8 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dumped its stock, about $1 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 1 funds in the second quarter.
Let’s go over hedge fund activity in other stocks similar to Willdan Group, Inc. (NASDAQ:WLDN). We will take a look at Eloxx Pharmaceuticals, Inc. (NASDAQ:ELOX), Vera Bradley, Inc. (NASDAQ:VRA), Brightcove Inc (NASDAQ:BCOV), and Tekla World Healthcare Fund (NYSE:THW). This group of stocks’ market values are similar to WLDN’s market value.
|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 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $9 million in WLDN’s case. Brightcove Inc (NASDAQ:BCOV) is the most popular stock in this table. On the other hand Tekla World Healthcare Fund (NYSE:THW) is the least popular one with only 1 bullish hedge fund positions. Willdan Group, Inc. (NASDAQ:WLDN) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately WLDN wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); WLDN investors were disappointed as the stock returned -5.8% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.