Immersion Corporation (IMMR) Fell Out Of Favor With Hedge Funds?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Immersion Corporation (NASDAQ:IMMR) in this article.

Immersion Corporation (NASDAQ:IMMR) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 20 hedge funds’ portfolios at the end of the first quarter of 2021. Our calculations also showed that IMMR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare IMMR to other stocks including NavSight Holdings, Inc. (NYSE:NSH), First Choice Bancorp (NASDAQ:FCBP), and Progenity, Inc. (NASDAQ:PROG) to get a better sense of its popularity.

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William Martin Raging Capital Management

William Martin of Raging Capital Management

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Do Hedge Funds Think IMMR Is A Good Stock To Buy Now?

At first quarter’s end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 11 hedge funds with a bullish position in IMMR a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

More specifically, Raging Capital Management was the largest shareholder of Immersion Corporation (NASDAQ:IMMR), with a stake worth $21.3 million reported as of the end of March. Trailing Raging Capital Management was Rima Senvest Management, which amassed a stake valued at $13 million. Millennium Management, Skylands Capital, and VIEX Capital Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Raging Capital Management allocated the biggest weight to Immersion Corporation (NASDAQ:IMMR), around 41.25% of its 13F portfolio. VIEX Capital Advisors is also relatively very bullish on the stock, setting aside 3.55 percent of its 13F equity portfolio to IMMR.

Since Immersion Corporation (NASDAQ:IMMR) has witnessed a decline in interest from the smart money, it’s safe to say that there were a few hedgies that slashed their positions entirely last quarter. At the top of the heap, Steven Ng and Andrew Mitchell’s Ophir Asset Management said goodbye to the largest position of all the hedgies monitored by Insider Monkey, totaling about $12 million in stock, and George McCabe’s Portolan Capital Management was right behind this move, as the fund sold off about $8.1 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks similar to Immersion Corporation (NASDAQ:IMMR). We will take a look at NavSight Holdings, Inc. (NYSE:NSH), First Choice Bancorp (NASDAQ:FCBP), Progenity, Inc. (NASDAQ:PROG), Infinity Pharmaceuticals Inc. (NASDAQ:INFI), Exagen Inc. (NASDAQ:XGN), Newpark Resources Inc (NYSE:NR), and Green Plains Partners LP (NASDAQ:GPP). This group of stocks’ market valuations are similar to IMMR’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NSH 21 110081 1
FCBP 4 3484 1
PROG 9 17814 0
INFI 15 84862 7
XGN 10 33248 9
NR 14 26587 0
GPP 4 26310 1
Average 11 43198 2.7

View table here if you experience formatting issues.

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 $43 million. That figure was $71 million in IMMR’s case. NavSight Holdings, Inc. (NYSE:NSH) is the most popular stock in this table. On the other hand First Choice Bancorp (NASDAQ:FCBP) is the least popular one with only 4 bullish hedge fund positions. Immersion Corporation (NASDAQ:IMMR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IMMR is 77.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately IMMR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on IMMR were disappointed as the stock returned -20.9% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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