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 SuRo Capital Corp. (NASDAQ:SSSS).
Is SSSS a good stock to buy now? SSSS investors should be aware of an increase in hedge fund sentiment lately. SuRo Capital Corp. (NASDAQ:SSSS) was in 8 hedge funds’ portfolios at the end of September. The all time high for this statistics is 9. There were 6 hedge funds in our database with SSSS positions at the end of the second quarter. Our calculations also showed that SSSS 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 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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 let’s take a glance at the recent hedge fund action regarding SuRo Capital Corp. (NASDAQ:SSSS).
What does smart money think about SuRo Capital Corp. (NASDAQ:SSSS)?
Heading into the fourth quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SSSS over the last 21 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Bulldog Investors was the largest shareholder of SuRo Capital Corp. (NASDAQ:SSSS), with a stake worth $5.1 million reported as of the end of September. Trailing Bulldog Investors was Arrowstreet Capital, which amassed a stake valued at $1.1 million. Citadel Investment Group, Two Sigma Advisors, and Millennium 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 Bulldog Investors allocated the biggest weight to SuRo Capital Corp. (NASDAQ:SSSS), around 1.64% of its 13F portfolio. One68 Global Capital is also relatively very bullish on the stock, setting aside 0.86 percent of its 13F equity portfolio to SSSS.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. One68 Global Capital, managed by David Nguyen and Nancy Oh, created the largest position in SuRo Capital Corp. (NASDAQ:SSSS). One68 Global Capital had $0.3 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also initiated a $0.2 million position during the quarter. The only other fund with a brand new SSSS position is Michael Gelband’s ExodusPoint Capital.
Let’s now take a look at hedge fund activity in other stocks similar to SuRo Capital Corp. (NASDAQ:SSSS). We will take a look at Spok Holdings Inc (NASDAQ:SPOK), Exfo Inc (NASDAQ:EXFO), ACNB Corporation (NASDAQ:ACNB), Avenue Therapeutics, Inc. (NASDAQ:ATXI), Checkpoint Therapeutics, Inc. (NASDAQ:CKPT), Milestone Pharmaceuticals Inc. (NASDAQ:MIST), and Sequans Communications SA (NYSE:SQNS). This group of stocks’ market caps resemble SSSS’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 4.6 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $9 million in SSSS’s case. Spok Holdings Inc (NASDAQ:SPOK) 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. SuRo Capital Corp. (NASDAQ:SSSS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SSSS is 60.6. 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. Hedge funds were also right about betting on SSSS as the stock returned 11.1% since the end of Q3 (through 12/2) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.