How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly-traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks have historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Harte-Hanks, Inc. (NYSE:HHS).
Harte-Hanks, Inc. (NYSE:HHS) was in 14 hedge funds’ portfolios at the end of September. Harte-Hanks, Inc. (NYSE:HHS) investors should pay attention to an increase in support from the world’s most elite money managers recently. There were 11 hedge funds in our database with Harte-Hanks, Inc. (NYSE:HHS) positions at the end of the previous quarter. At the end of this article, we will also compare Harte-Hanks, Inc. (NYSE:HHS) to other stocks including Cambium Learning Group, Inc. (NASDAQ:ABCD), West Marine, Inc. (NASDAQ:WMAR), and CECO Environmental Corp. (NASDAQ:CECE) to get a better sense of its popularity.
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At the moment there are a lot of gauges shareholders put to use to appraise publicly traded companies. A pair of the most underrated gauges are hedge fund and insider trading interest. Hedge fund experts at Insider Monkey have shown that, historically, those who follow the top picks of the top investment managers can outclass their index-focused peers by a very impressive amount (see the details here).
Now, we’re going to take a gander at the latest action surrounding Harte-Hanks, Inc. (NYSE:HHS).
What have hedge funds been doing with Harte-Hanks, Inc. (NYSE:HHS)?
Heading into Q4, a total of 14 of the hedge funds tracked by Insider Monkey were long in this stock, an increase of 27% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Jim Simons’ Renaissance Technologies had the most valuable position in Harte-Hanks, Inc. (NYSE:HHS), worth close to $2.4 million, amounting to less than 0.1% of its total 13F portfolio. Sitting in the number two spot is Chuck Royce of Royce & Associates, with a $1.6 million position; less than 0.1% of its 13F portfolio is allocated to the company. Some other peers that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Ken Griffin’s Citadel Investment Group, and Cliff Asness’ AQR Capital Management.
As aggregate interest increased, key money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, initiated the largest position in Harte-Hanks, Inc. (NYSE:HHS). Millennium Management had $0.9 million invested in the company at the end of the quarter. Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners also initiated a $0.1 million position during the quarter. The other funds with new positions in the stock are Michael Platt and William Reeves’ BlueCrest Capital Mgmt., GRT Capital Partners, and Glenn Russell Dubin’s Highbridge Capital Management.
Let’s also take a look at hedge fund activity in other stocks similar to Harte-Hanks, Inc. (NYSE:HHS). We will take a look at Cambium Learning Group, Inc. (NASDAQ:ABCD), West Marine, Inc. (NASDAQ:WMAR), CECO Environmental Corp. (NASDAQ:CECE), and LeMaitre Vascular Inc (NASDAQ:LMAT). This group of stocks’ market valuations are similar to Harte-Hanks, Inc. (NYSE:HHS)’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $20 million, while $12 million of Harte-Hanks shares were owned. CECO Environmental Corp. (NASDAQ:CECE) is the most popular stock in this table. On the other hand Cambium Learning Group, Inc. (NASDAQ:ABCD) is the least popular one with only four bullish hedge fund positions. Harte-Hanks, Inc. (NYSE:HHS) is not the most popular stock in this group but hedge fund interest is still above average and rising. Given that, the stock is worthy of consideration for a place in one’s portfolio.