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Here’s What Hedge Funds Think About Verra Mobility Corporation (VRRM)

After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of March 31. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Verra Mobility Corporation (NASDAQ:VRRM).

Verra Mobility Corporation (NASDAQ:VRRM) investors should pay attention to an increase in hedge fund interest lately. VRRM was in 14 hedge funds’ portfolios at the end of March. There were 13 hedge funds in our database with VRRM holdings at the end of the previous quarter. Our calculations also showed that VRRM isn’t among the 30 most popular stocks among hedge funds.

According to most shareholders, hedge funds are seen as worthless, old financial vehicles of the past. While there are more than 8000 funds trading at the moment, Our experts hone in on the top tier of this club, about 750 funds. It is estimated that this group of investors handle the lion’s share of the smart money’s total capital, and by following their inimitable stock picks, Insider Monkey has found several investment strategies that have historically defeated Mr. Market. Insider Monkey’s flagship hedge fund strategy beat the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).

MILLENNIUM MANAGEMENT

Let’s analyze the key hedge fund action encompassing Verra Mobility Corporation (NASDAQ:VRRM).

What does smart money think about Verra Mobility Corporation (NASDAQ:VRRM)?

Heading into the second quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in VRRM a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

VRRM_jun2019

More specifically, Cardinal Capital was the largest shareholder of Verra Mobility Corporation (NASDAQ:VRRM), with a stake worth $45.6 million reported as of the end of March. Trailing Cardinal Capital was Millennium Management, which amassed a stake valued at $32 million. Crescent Park Management, Arrowgrass Capital Partners, and Simcoe Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.

With a general bullishness amongst the heavyweights, key money managers have jumped into Verra Mobility Corporation (NASDAQ:VRRM) headfirst. Millennium Management, managed by Israel Englander, established the most outsized position in Verra Mobility Corporation (NASDAQ:VRRM). Millennium Management had $32 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $7 million position during the quarter. The following funds were also among the new VRRM investors: Jim Simons’s Renaissance Technologies and Brian Gootzeit and Andrew Frank’s StackLine Partners.

Let’s now take a look at hedge fund activity in other stocks similar to Verra Mobility Corporation (NASDAQ:VRRM). These stocks are ProAssurance Corporation (NYSE:PRA), LivePerson, Inc. (NASDAQ:LPSN), Compass Minerals International, Inc. (NYSE:CMP), and QEP Resources Inc (NYSE:QEP). This group of stocks’ market caps match VRRM’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PRA 14 153430 1
LPSN 21 239043 4
CMP 13 100028 1
QEP 23 291990 -2
Average 17.75 196123 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $196 million. That figure was $188 million in VRRM’s case. QEP Resources Inc (NYSE:QEP) is the most popular stock in this table. On the other hand Compass Minerals International, Inc. (NYSE:CMP) is the least popular one with only 13 bullish hedge fund positions. Verra Mobility Corporation (NASDAQ:VRRM) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on VRRM, though not to the same extent, as the stock returned 5.2% during the same time frame and outperformed the market as well.

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

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