Is TheStreet, Inc. (NASDAQ:TST) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Hedge fund interest in TheStreet, Inc. (NASDAQ:TST) shares was flat at the end of last quarter. This is usually a negative indicator, coupled with the fact that the shares of the company were down 7.73% during the third quarter. In order to understand more about the hedge fund sentiment, we will find out more about the hedge funds that held positions TheStreet, Inc. (NASDAQ:TST) at the end of the 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 GigOptix Inc (NYSEMKT:GIG), Lombard Medical Inc (NASDAQ:EVAR), and Xplore Technologies Corp. (NASDAQ:XPLR) to gather more data points.
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According to most market participants, hedge funds are assumed to be underperforming, outdated financial tools of years past. While there are greater than 8000 funds with their doors open at present, we hone in on the moguls of this group, approximately 700 funds. These money managers manage the majority of the hedge fund industry’s total asset base, and by observing their finest stock picks, Insider Monkey has identified a number of investment strategies that have historically beaten the market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Now, let’s take a look at the fresh action encompassing TheStreet, Inc. (NASDAQ:TST).
How have hedgies been trading TheStreet, Inc. (NASDAQ:TST)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, William C. Martin’s Raging Capital Management has the largest position in TheStreet, Inc. (NASDAQ:TST), worth close to $4.9 million, corresponding to 0.6% of its total 13F portfolio. On Raging Capital Management’s heels is Cannell Capital, managed by J. Carlo Cannell, which holds a $4.9 million position; 1.8% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish contain Renaissance Technologies, Jeffrey Moskowitz’s Harvey Partners, and Gregory Bylinsky and Jefferson Gramm’s Bandera Partners.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as TheStreet, Inc. (NASDAQ:TST) but similarly valued. We will take a look at GigOptix Inc (NYSEMKT:GIG), Lombard Medical Inc (NASDAQ:EVAR), Xplore Technologies Corp. (NASDAQ:XPLR), and Aldeyra Therapeutics Inc (NASDAQ:ALDX). This group of stocks’ market values resemble TheStreet, Inc. (NASDAQ:TST)’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GIG | 7 | 8561 | 2 |
| EVAR | 4 | 4534 | 0 |
| XPLR | 4 | 2768 | 0 |
| ALDX | 7 | 13025 | 0 |
As you can see, these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $16 million in TheStreet, Inc. (NASDAQ:TST)’s case. GigOptix Inc (NYSEMKT:GIG) is the most popular stock in this table. On the other hand, Lombard Medical Inc (NASDAQ:EVAR) is the least popular one with only 4 bullish hedge fund positions. TheStreet, Inc. (NASDAQ:TST) 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. In this regard, GigOptix Inc (NYSEMKT:GIG) might be a better candidate to consider a long position.
