Is Supercom Ltd (SPCB) A Good Stock To Buy?

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At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Is Supercom Ltd (NASDAQ:SPCB) an exceptional investment today? Money managers are getting less bullish. The number of long hedge fund bets shrunk by 3 in recent months. Echoing a similar sentiment, the shares of Supercom Ltd (NASDAQ:SPCB) lost 36.91% value during the last quarter. For a better understanding of hedge fund sentiment, we will find out more about the hedge funds that held stakes in the company, at the end of the last quarter.

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 Consumer Portfolio Services, Inc. (NASDAQ:CPSS), Veracyte Inc (NASDAQ:VCYT), and Cadiz Inc (NASDAQ:CDZI) to gather more data points.

At the moment, there are a large number of signals market participants use to evaluate their stock investments. Some of the less known signals are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the elite investment managers can beat the broader indices by a significant margin (see the details here).

Keeping this in mind, we’re going to take a peek at the key action encompassing Supercom Ltd (NASDAQ:SPCB).

What have hedge funds been doing with Supercom Ltd (NASDAQ:SPCB)?

At the end of Q3, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decrease of 27% from the previous quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Brett Hendrickson’s Nokomis Capital has the number one position in Supercom Ltd (NASDAQ:SPCB), worth close to $2.8 million, amounting to 0.8% of its total 13F portfolio. Coming in second is Royce & Associates, managed by Chuck Royce, which holds a $1.6 million position; less than 0.1% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions encompass Israel Englander’s Millennium Management, Andy Redleaf’s Whitebox Advisors, and Renaissance Technologies.

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