Is SPOK A Good Stock To Buy Now?

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 Spok Holdings Inc (NASDAQ:SPOK) based on that data.

Is SPOK a good stock to buy now? Prominent investors were getting more bullish. The number of long hedge fund positions moved up by 2 lately. Spok Holdings Inc (NASDAQ:SPOK) was in 14 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 13. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SPOK 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). There were 12 hedge funds in our database with SPOK positions at the end of the second quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

To the average investor there are a multitude of gauges stock market investors can use to evaluate publicly traded companies. A pair of the less utilized gauges are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the best fund managers can beat the market by a solid margin (see the details here).

Paul Marshall Marshall Wace

Paul Marshall of Marshall Wace

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 check out the key hedge fund action encompassing Spok Holdings Inc (NASDAQ:SPOK).

Do Hedge Funds Think SPOK Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2020, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in SPOK a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

Is SPOK A Good Stock To Buy?

Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the most valuable position in SPOK. Renaissance Technologies has a $14.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $1.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism encompass Noam Gottesman’s GLG Partners, Warren Lammert’s Granite Point Capital and Ali Motamed’s Invenomic Capital Management. In terms of the portfolio weights assigned to each position Invenomic Capital Management allocated the biggest weight to Spok Holdings Inc (NASDAQ:SPOK), around 0.36% of its 13F portfolio. Granite Point Capital is also relatively very bullish on the stock, dishing out 0.05 percent of its 13F equity portfolio to SPOK.

As industrywide interest jumped, specific money managers were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, created the most valuable position in Spok Holdings Inc (NASDAQ:SPOK). Citadel Investment Group had $0.2 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $0.2 million position during the quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Spok Holdings Inc (NASDAQ:SPOK) but similarly valued. We will take a look at Exfo Inc (NASDAQ:EXFO), ACNB Corporation (NASDAQ:ACNB), Avenue Therapeutics, Inc. (NASDAQ:ATXI), Checkpoint Therapeutics, Inc. (NASDAQ:CKPT), Milestone Pharmaceuticals Inc. (NASDAQ:MIST), Sequans Communications SA (NYSE:SQNS), and Altus Midstream Company (NASDAQ:ALTM). This group of stocks’ market caps match SPOK’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EXFO 1 3274 0
ACNB 1 1084 0
ATXI 2 11486 0
CKPT 3 3104 0
MIST 6 36390 3
SQNS 5 22324 0
ALTM 2 1021 -4
Average 2.9 11240 -0.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 2.9 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $21 million in SPOK’s case. Milestone Pharmaceuticals Inc. (NASDAQ:MIST) is the most popular stock in this table. On the other hand Exfo Inc (NASDAQ:EXFO) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Spok Holdings Inc (NASDAQ:SPOK) is more popular among hedge funds. Our overall hedge fund sentiment score for SPOK is 87. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Unfortunately SPOK wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SPOK were disappointed as the stock returned 7.3% since the end of the third quarter (through 12/8) 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.

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Disclosure: None. This article was originally published at Insider Monkey.