We at Insider Monkey have gone over 817 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of MiX Telematics Limited (NYSE:MIXT) based on that data.
Is MiX Telematics (MIXT) a good stock to buy now? MIXT shareholders have witnessed a decrease in enthusiasm from smart money recently. MiX Telematics Limited (NYSE:MIXT) was in 7 hedge funds’ portfolios at the end of September. The all time high for this statistics is 12. There were 8 hedge funds in our database with MIXT positions at the end of the second quarter. Our calculations also showed that MIXT 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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. With all of this in mind we’re going to review the fresh hedge fund action encompassing MiX Telematics Limited (NYSE:MIXT).
What have hedge funds been doing with MiX Telematics Limited (NYSE:MIXT)?
At the end of September, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in MIXT over the last 21 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of MiX Telematics Limited (NYSE:MIXT), with a stake worth $6.4 million reported as of the end of September. Trailing Renaissance Technologies was Bandera Partners, which amassed a stake valued at $4.8 million. Polar Capital, Arrowstreet Capital, and G2 Investment Partners Management 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 Bandera Partners allocated the biggest weight to MiX Telematics Limited (NYSE:MIXT), around 3.14% of its 13F portfolio. G2 Investment Partners Management is also relatively very bullish on the stock, designating 0.27 percent of its 13F equity portfolio to MIXT.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Boardman Bay Capital Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified MIXT as a viable investment and initiated a position in the stock.
Let’s also examine hedge fund activity in other stocks similar to MiX Telematics Limited (NYSE:MIXT). These stocks are Otonomy Inc (NASDAQ:OTIC), Heat Biologics, Inc. (NASDAQ:HTBX), Vuzix Corporation (NASDAQ:VUZI), Mereo BioPharma Group plc (NASDAQ:MREO), Axovant Gene Therapies Ltd. (NASDAQ:AXGT), BRT Apartments Corp (NYSE:BRT), and Spirit of Texas Bancshares, Inc. (NASDAQ:STXB). All of these stocks’ market caps are similar to MIXT’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 8.4 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $16 million in MIXT’s case. Otonomy Inc (NASDAQ:OTIC) is the most popular stock in this table. On the other hand Heat Biologics, Inc. (NASDAQ:HTBX) is the least popular one with only 1 bullish hedge fund positions. MiX Telematics Limited (NYSE:MIXT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MIXT is 41.5. 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. 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 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on MIXT as the stock returned 18.5% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.