In this article we will take a look at whether hedge funds think Resonant Inc. (NASDAQ:RESN) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Resonant (RESN) a good stock to buy now? Hedge fund interest in Resonant Inc. (NASDAQ:RESN) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that RESN 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). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as The Community Financial Corp (NASDAQ:TCFC), PlayAGS, Inc. (NYSE:AGS), and Diana Shipping Inc. (NYSE:DSX) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are a lot of gauges stock traders can use to appraise stocks. A duo of the less known gauges are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the top money managers can trounce the S&P 500 by a superb 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. With all of this in mind let’s go over the recent hedge fund action surrounding Resonant Inc. (NASDAQ:RESN).
What have hedge funds been doing with Resonant Inc. (NASDAQ:RESN)?
Heading into the fourth quarter of 2020, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in RESN over the last 21 quarters. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Robert Joseph Caruso’s Select Equity Group has the biggest position in Resonant Inc. (NASDAQ:RESN), worth close to $6 million, corresponding to less than 0.1%% of its total 13F portfolio. On Select Equity Group’s heels is Ken Griffin of Citadel Investment Group, with a $0.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions contain Will Graves’s Boardman Bay Capital Management, David Harding’s Winton Capital Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Boardman Bay Capital Management allocated the biggest weight to Resonant Inc. (NASDAQ:RESN), around 0.22% of its 13F portfolio. Select Equity Group is also relatively very bullish on the stock, dishing out 0.03 percent of its 13F equity portfolio to RESN.
Seeing as Resonant Inc. (NASDAQ:RESN) has experienced bearish sentiment from hedge fund managers, it’s safe to say that there were a few fund managers who sold off their entire stakes by the end of the third quarter. Interestingly, Israel Englander’s Millennium Management said goodbye to the largest investment of all the hedgies watched by Insider Monkey, valued at about $0.1 million in stock, and Donald Sussman’s Paloma Partners was right behind this move, as the fund cut about $0 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Resonant Inc. (NASDAQ:RESN) but similarly valued. These stocks are The Community Financial Corp (NASDAQ:TCFC), PlayAGS, Inc. (NYSE:AGS), Diana Shipping Inc. (NYSE:DSX), vTv Therapeutics Inc (NASDAQ:VTVT), Olympic Steel, Inc. (NASDAQ:ZEUS), Applied Genetic Technologies Corp (NASDAQ:AGTC), and Protalix BioTherapeutics Inc. (NYSE:PLX). This group of stocks’ market caps resemble RESN’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 $14 million. That figure was $7 million in RESN’s case. PlayAGS, Inc. (NYSE:AGS) is the most popular stock in this table. On the other hand The Community Financial Corp (NASDAQ:TCFC) is the least popular one with only 3 bullish hedge fund positions. Resonant Inc. (NASDAQ:RESN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RESN is 47.5. 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. 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 RESN wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); RESN investors were disappointed as the stock returned -4.2% 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.