We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Peltz’s recent General Electric losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Asure Software Inc (NASDAQ:ASUR).
Is Asure Software Inc (ASUR) a good stock to buy now? ASUR shareholders have witnessed a decrease in enthusiasm from smart money recently. Asure Software Inc (NASDAQ:ASUR) was in 5 hedge funds’ portfolios at the end of September. The all time high for this statistics is 10. Our calculations also showed that ASUR isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
Today there are tons of signals market participants can use to analyze their stock investments. Some of the less utilized signals are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the best investment managers can outclass the broader indices by a significant amount (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind we’re going to view the key hedge fund action regarding Asure Software Inc (NASDAQ:ASUR).
How are hedge funds trading Asure Software Inc (NASDAQ:ASUR)?
At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -44% from the second quarter of 2020. On the other hand, there were a total of 5 hedge funds with a bullish position in ASUR a year ago. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Gregg J. Powers’s Private Capital Management has the biggest position in Asure Software Inc (NASDAQ:ASUR), worth close to $13.2 million, amounting to 3% of its total 13F portfolio. Coming in second is P.A.W. CAPITAL PARTNERS, led by Peter A. Wright, holding a $3 million position; 3.3% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions consist of Charles Paquelet’s Skylands Capital, Frederick DiSanto’s Ancora Advisors and Renaissance Technologies. In terms of the portfolio weights assigned to each position P.A.W. CAPITAL PARTNERS allocated the biggest weight to Asure Software Inc (NASDAQ:ASUR), around 3.29% of its 13F portfolio. Private Capital Management is also relatively very bullish on the stock, earmarking 3.02 percent of its 13F equity portfolio to ASUR.
Seeing as Asure Software Inc (NASDAQ:ASUR) has witnessed declining sentiment from the entirety of the hedge funds we track, logic holds that there were a few fund managers that elected to cut their positions entirely last quarter. At the top of the heap, David Harding’s Winton Capital Management cut the largest position of the 750 funds tracked by Insider Monkey, valued at close to $0.8 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also said goodbye to its stock, about $0.3 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 4 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to Asure Software Inc (NASDAQ:ASUR). These stocks are Evans Bancorp Inc. (NYSE:EVBN), DHI Group Inc. (NYSE:DHX), Saga Communications, Inc. (NASDAQ:SGA), Aviat Networks Inc (NASDAQ:AVNW), ObsEva SA (NASDAQ:OBSV), County Bancorp, Inc. (NASDAQ:ICBK), and Ardmore Shipping Corp (NYSE:ASC). All of these stocks’ market caps resemble ASUR’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.3 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $17 million in ASUR’s case. Ardmore Shipping Corp (NYSE:ASC) is the most popular stock in this table. On the other hand Saga Communications, Inc. (NYSE:SGA) is the least popular one with only 3 bullish hedge fund positions. Asure Software Inc (NASDAQ:ASUR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ASUR is 27.1. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and surpassed the market again by 16.1 percentage points. Unfortunately ASUR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ASUR investors were disappointed as the stock returned 5.8% since the end of September (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.