The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards MiX Telematics Limited (NYSE:MIXT).
MiX Telematics Limited (NYSE:MIXT) was in 9 hedge funds’ portfolios at the end of March. MIXT investors should be aware of a decrease in support from the world’s most elite money managers lately. There were 12 hedge funds in our database with MIXT holdings at the end of the previous quarter. Our calculations also showed that MIXT isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 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 leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a look at the latest hedge fund action regarding MiX Telematics Limited (NYSE:MIXT).
How have hedgies been trading MiX Telematics Limited (NYSE:MIXT)?
At Q1’s end, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of -25% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards MIXT over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in MiX Telematics Limited (NYSE:MIXT) was held by Renaissance Technologies, which reported holding $5.2 million worth of stock at the end of September. It was followed by Bandera Partners with a $4.7 million position. Other investors bullish on the company included G2 Investment Partners Management, Polar Capital, and Roumell Asset Management. In terms of the portfolio weights assigned to each position Roumell Asset Management allocated the biggest weight to MiX Telematics Limited (NYSE:MIXT), around 4.3% of its 13F portfolio. Bandera Partners is also relatively very bullish on the stock, earmarking 3.92 percent of its 13F equity portfolio to MIXT.
Judging by the fact that MiX Telematics Limited (NYSE:MIXT) has witnessed declining sentiment from the smart money, it’s easy to see that there was a specific group of money managers who sold off their positions entirely in the first quarter. It’s worth mentioning that Israel Englander’s Millennium Management sold off the largest investment of the “upper crust” of funds followed by Insider Monkey, worth an estimated $1.3 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund sold off about $1.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 3 funds in the first quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as MiX Telematics Limited (NYSE:MIXT) but similarly valued. These stocks are Co-Diagnostics, Inc. (NASDAQ:CODX), Osmotica Pharmaceuticals plc (NASDAQ:OSMT), Hibbett Sports, Inc. (NASDAQ:HIBB), and NuCana plc (NASDAQ:NCNA). All of these stocks’ market caps resemble MIXT’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 9 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $18 million in MIXT’s case. Hibbett Sports, Inc. (NASDAQ:HIBB) is the most popular stock in this table. On the other hand NuCana plc (NASDAQ:NCNA) is the least popular one with only 4 bullish hedge fund positions. MiX Telematics Limited (NYSE:MIXT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd and surpassed the market by 15.9 percentage points. Unfortunately MIXT wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); MIXT investors were disappointed as the stock returned 6.1% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.