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How Immersion Corporation (IMMR) Stacks Up Against Its Market Cap Peers

Is Immersion Corporation (NASDAQ:IMMR) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Immersion Corporation (NASDAQ:IMMR) investors should pay attention to an increase in hedge fund interest recently. IMMR was in 17 hedge funds’ portfolios at the end of June. There were 15 hedge funds in our database with IMMR holdings at the end of the previous quarter. Yesterday William Martin’s Raging Capital filed an amended 13D which revealed that Raging Capital hasn’t made any changes to its position. In its latest earnings call the company said the following:

Regarding our expense outlook for 2018, we now expect GAAP operating expenses, excluding litigation, to be between $47 million and $49 million. Litigation expenses of $9 million to $10 million and stock-based compensation expense of $8 million to $9 million for the year. Due to the full valuation allowance, we are forecasting cash tax expense for the year to be approximately $300,000.

In the financial world there are many gauges investors put to use to analyze publicly traded companies. A pair of the most useful gauges are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the elite money managers can trounce the broader indices by a very impressive amount. Insider Monkey’s flagship best performing hedge funds strategy returned 17.4% year to date and outperformed the market by more than 14 percentage points this year. This strategy also outperformed the market by 3 percentage points in the fourth quarter despite the market volatility (see the details here).

William Martin Raging Capital Management

Let’s take a look at the latest hedge fund action encompassing Immersion Corporation (NASDAQ:IMMR).

Hedge fund activity in Immersion Corporation (NASDAQ:IMMR)

Heading into the fourth quarter of 2018, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards IMMR over the last 6 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

IMMR_nov2018

The largest stake in Immersion Corporation (NASDAQ:IMMR) was held by Raging Capital Management, which reported holding $73.8 million worth of stock at the end of June. It was followed by Senvest Management with a $25.8 million position. Other investors bullish on the company included Shannon River Fund Management, Algert Coldiron Investors, and Blue Mountain Capital.

With a general bullishness amongst the heavyweights, specific money managers have jumped into Immersion Corporation (NASDAQ:IMMR) headfirst. Algert Coldiron Investors, managed by Peter Algert and Kevin Coldiron, initiated the most valuable position (with respect to the fund’s portfolio size) in Immersion Corporation (NASDAQ:IMMR). Algert Coldiron Investors had $0.3 million invested in the company at the end of the quarter. Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital also made a $1.7 million investment in the stock during the quarter. The other funds with brand new IMMR positions are Noam Gottesman’s GLG Partners, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, and Joel Greenblatt’s Gotham Asset Management.

Let’s go over hedge fund activity in other stocks similar to Immersion Corporation (NASDAQ:IMMR). These stocks are Ellington Financial LLC (NYSE:EFC), Zymeworks Inc. (NYSE:ZYME), The First Bancshares, Inc. (MS) (NASDAQ:FBMS), and SIGA Technologies Inc. (NASDAQ:SIGA). This group of stocks’ market valuations resemble IMMR’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EFC 3 17616 1
ZYME 12 82152 10
FBMS 7 39287 0
SIGA 7 39102 1

As you can see these stocks had an average of 7.25 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $172 million in IMMR’s case. Zymeworks Inc. (NYSE:ZYME) is the most popular stock in this table. On the other hand Ellington Financial LLC (NYSE:EFC) is the least popular one with only 3 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.

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

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