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Mobileiron Inc (MOBL): Hedge Funds Cashing Out

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Mobileiron Inc (NASDAQ:MOBL) based on that data.

Is Mobileiron Inc (NASDAQ:MOBL) going to take off soon? Prominent investors are in a pessimistic mood. The number of bullish hedge fund bets shrunk by 3 lately. Our calculations also showed that MOBL 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). MOBL was in 15 hedge funds’ portfolios at the end of the first quarter of 2020. There were 18 hedge funds in our database with MOBL holdings at the end of the previous quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

Rishi Bajaj - Altai Capital

Rishi Bajaj of Altai Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology’s influence will go beyond online payments. So, we are checking out this futurist’s moonshot opportunities in tech stocks. 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. Now let’s check out the new hedge fund action surrounding Mobileiron Inc (NASDAQ:MOBL).

How are hedge funds trading Mobileiron Inc (NASDAQ:MOBL)?

At Q1’s end, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the fourth quarter of 2019. By comparison, 17 hedge funds held shares or bullish call options in MOBL 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.

Among these funds, Lynrock Lake held the most valuable stake in Mobileiron Inc (NASDAQ:MOBL), which was worth $48.1 million at the end of the third quarter. On the second spot was Altai Capital which amassed $30.2 million worth of shares. Renaissance Technologies, Divisar Capital, and Two Sigma Advisors 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 Altai Capital allocated the biggest weight to Mobileiron Inc (NASDAQ:MOBL), around 52.34% of its 13F portfolio. Lynrock Lake is also relatively very bullish on the stock, setting aside 4.74 percent of its 13F equity portfolio to MOBL.

Since Mobileiron Inc (NASDAQ:MOBL) has witnessed declining sentiment from the smart money, it’s easy to see that there was a specific group of fund managers that decided to sell off their full holdings last quarter. Interestingly, Joe Milano’s Greenhouse Funds cut the biggest stake of all the hedgies monitored by Insider Monkey, totaling an estimated $3.3 million in stock. Gavin Saitowitz and Cisco J. del Valle’s fund, Springbok Capital, also dumped its stock, about $0.3 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 3 funds last quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Mobileiron Inc (NASDAQ:MOBL) but similarly valued. These stocks are Arch Resources, Inc. (NYSE:ARCH), CrossFirst Bankshares, Inc. (NASDAQ:CFB), Kimball International Inc (NASDAQ:KBAL), and Merchants Bancorp (NASDAQ:MBIN). All of these stocks’ market caps match MOBL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ARCH 24 88620 -2
CFB 6 8848 0
KBAL 12 79326 0
MBIN 8 9811 -1
Average 12.5 46651 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $111 million in MOBL’s case. Arch Resources, Inc. (NYSE:ARCH) is the most popular stock in this table. On the other hand CrossFirst Bankshares, Inc. (NASDAQ:CFB) is the least popular one with only 6 bullish hedge fund positions. Mobileiron Inc (NASDAQ:MOBL) is not the most popular stock in this group but hedge fund interest is still above average. 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 13.3% in 2020 through June 25th but still beat the market by 16.8 percentage points. Hedge funds were also right about betting on MOBL as the stock returned 27.1% in Q2 (through June 25th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.