It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Amber Road Inc (NYSE:AMBR).
Amber Road Inc (NYSE:AMBR) has seen an increase in hedge fund interest lately. AMBR was in 13 hedge funds’ portfolios at the end of September. There were 10 hedge funds in our database with AMBR holdings at the end of the previous quarter. At the end of this article we will also compare AMBR to other stocks including Agilysys, Inc. (NASDAQ:AGYS), Ducommun Incorporated (NYSE:DCO), and OvaScience Inc (NASDAQ:OVAS) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Hedge fund activity in Amber Road Inc (NYSE:AMBR)
At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, up by 30% from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in AMBR over the last 5 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Josh Goldberg’s G2 Investment Partners Management has the most valuable position in Amber Road Inc (NYSE:AMBR), worth close to $13.9 million, accounting for 6.4% of its total 13F portfolio. On G2 Investment Partners Management’s heels is Chuck Royce of Royce & Associates, with a $11 million position. Remaining professional money managers that hold long positions consist of Millennium Management, one of the 10 largest hedge funds in the world, Jim Simons’ Renaissance Technologies,and Mark Coe’s Coe Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. John Overdeck and David Siegel of Two Sigma Advisors assembled the most outsized position in Amber Road Inc (NYSE:AMBR). Two Sigma Advisors had $1.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $1.1 million position during the quarter. The other funds with new positions in the stock are Mark Broach’s Manatuck Hill Partners, Glenn Russell Dubin’s Highbridge Capital Management, and Peter Muller’s PDT Partners.
Let’s now review hedge fund activity in other stocks similar to Amber Road Inc (NYSE:AMBR). These stocks are Agilysys, Inc. (NASDAQ:AGYS), Ducommun Incorporated (NYSE:DCO), OvaScience Inc (NASDAQ:OVAS), and Bluerock Residential Growth REIT Inc (NYSEMKT:BRG). This group of stocks’ market values resemble AMBR’s market value.
|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 9 hedge funds with bullish positions and the average amount invested in these stocks was $52 million. That figure was $41 million in AMBR’s case. OvaScience Inc (NASDAQ:OVAS) is the most popular stock in this table. On the other hand Agilysys, Inc. (NASDAQ:AGYS) is the least popular one with only 8 bullish hedge fund positions. Amber Road Inc (NYSE:AMBR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard OVAS might be a better candidate to consider taking a long position in.