A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Spok Holdings Inc (NASDAQ:SPOK).
Hedge fund interest in Spok Holdings Inc (NASDAQ:SPOK) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare SPOK to other stocks including InnerWorkings, Inc. (NASDAQ:INWK), Timberland Bancorp, Inc. (NASDAQ:TSBK), and Panhandle Oil and Gas Inc. (NYSE:PHX) to get a better sense of its popularity.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to review the latest hedge fund action surrounding Spok Holdings Inc (NASDAQ:SPOK).
What have hedge funds been doing with Spok Holdings Inc (NASDAQ:SPOK)?
At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 10 hedge funds held shares or bullish call options in SPOK a year ago. 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, Renaissance Technologies has the most valuable position in Spok Holdings Inc (NASDAQ:SPOK), worth close to $18.4 million, amounting to less than 0.1%% of its total 13F portfolio. Coming in second is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $2.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining professional money managers with similar optimism consist of Noam Gottesman’s GLG Partners, Israel Englander’s Millennium Management and David E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Tudor Investment Corp allocated the biggest weight to Spok Holdings Inc (NASDAQ:SPOK), around 0.02% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to SPOK.
Due to the fact that Spok Holdings Inc (NASDAQ:SPOK) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of hedge funds that slashed their positions entirely in the third quarter. At the top of the heap, Frank Slattery’s Symmetry Peak Management sold off the largest stake of the “upper crust” of funds followed by Insider Monkey, worth close to $0.2 million in stock. Gavin Saitowitz and Cisco J. del Valle’s fund, Springbok Capital, also dropped its stock, about $0.1 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks similar to Spok Holdings Inc (NASDAQ:SPOK). These stocks are InnerWorkings, Inc. (NASDAQ:INWK), Timberland Bancorp, Inc. (NASDAQ:TSBK), Panhandle Oil and Gas Inc. (NYSE:PHX), and L.B. Foster Company (NASDAQ:FSTR). This group of stocks’ market valuations resemble SPOK’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INWK | 14 | 39181 | 0 |
| TSBK | 3 | 30150 | 0 |
| PHX | 3 | 34248 | -1 |
| FSTR | 11 | 52504 | -4 |
| Average | 7.75 | 39021 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $27 million in SPOK’s case. InnerWorkings, Inc. (NASDAQ:INWK) is the most popular stock in this table. On the other hand Timberland Bancorp, Inc. (NASDAQ:TSBK) is the least popular one with only 3 bullish hedge fund positions. Spok Holdings Inc (NASDAQ:SPOK) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 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 4.2% during the fourth quarter (through the end of November) 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
