Inseego Corp. (INSG): Are Hedge Funds Right About This Stock?

At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (see why hell is coming). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Inseego Corp. (NASDAQ:INSG) at the end of the first quarter and determine whether the smart money was really smart about this stock.

Inseego Corp. (NASDAQ:INSG) was in 12 hedge funds’ portfolios at the end of March. INSG investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. There were 8 hedge funds in our database with INSG positions at the end of the previous quarter. Our calculations also showed that INSG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are numerous methods shareholders can use to evaluate stocks. A pair of the less utilized methods are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the best fund managers can outpace the S&P 500 by a healthy amount (see the details here).

Carlo Cannell

J. Carlo Cannell of Cannell Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to check out the recent hedge fund action regarding Inseego Corp. (NASDAQ:INSG).

How are hedge funds trading Inseego Corp. (NASDAQ:INSG)?

Heading into the second quarter of 2020, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards INSG over the last 18 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Cannell Capital held the most valuable stake in Inseego Corp. (NASDAQ:INSG), which was worth $10.1 million at the end of the third quarter. On the second spot was Islet Management which amassed $5 million worth of shares. Citadel Investment Group, D E Shaw, and Citadel Investment Group 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 Cannell Capital allocated the biggest weight to Inseego Corp. (NASDAQ:INSG), around 4.2% of its 13F portfolio. Islet Management is also relatively very bullish on the stock, earmarking 0.73 percent of its 13F equity portfolio to INSG.

As aggregate interest increased, specific money managers were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, established the most outsized position in Inseego Corp. (NASDAQ:INSG). Citadel Investment Group had $1.2 million invested in the company at the end of the quarter. Nick Thakore’s Diametric Capital also initiated a $0.4 million position during the quarter. The other funds with brand new INSG positions are Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, Hoon Kim’s Quantinno Capital, and Jonathan Soros’s JS Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Inseego Corp. (NASDAQ:INSG) but similarly valued. These stocks are BELLUS Health Inc. (NASDAQ:BLU), Translate Bio, Inc. (NASDAQ:TBIO), Federal Agricultural Mortgage Corp. (NYSE:AGM), and Resideo Technologies, Inc. (NYSE:REZI). This group of stocks’ market caps match INSG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BLU 14 156516 -2
TBIO 7 224195 -2
AGM 9 20831 -1
REZI 25 151073 4
Average 13.75 138154 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $138 million. That figure was $19 million in INSG’s case. Resideo Technologies, Inc. (NYSE:REZI) is the most popular stock in this table. On the other hand Translate Bio, Inc. (NASDAQ:TBIO) is the least popular one with only 7 bullish hedge fund positions. Inseego Corp. (NASDAQ:INSG) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th and still beat the market by 15.5 percentage points. A small number of hedge funds were also right about betting on INSG as the stock returned 86.2% during the second quarter and outperformed the market by an even larger margin.

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