Is Pareteum Corporation (NASDAQ:TEUM) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Pareteum Corporation (NASDAQ:TEUM) a buy here? Investors who are in the know are turning bullish. The number of bullish hedge fund bets increased by 2 recently. Our calculations also showed that TEUM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). TEUM was in 5 hedge funds’ portfolios at the end of September. There were 3 hedge funds in our database with TEUM holdings at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are dozens of signals market participants can use to evaluate stocks. A couple of the most under-the-radar signals are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the elite fund managers can outperform the S&P 500 by a solid amount (see the details here).
Cliff Asness of AQR Capital Management
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Now let’s analyze the latest hedge fund action surrounding Pareteum Corporation (NASDAQ:TEUM).
Hedge fund activity in Pareteum Corporation (NASDAQ:TEUM)
Heading into the fourth quarter of 2019, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 67% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in TEUM a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Sabby Capital, managed by Hal Mintz, holds the most valuable position in Pareteum Corporation (NASDAQ:TEUM). Sabby Capital has a $2.9 million position in the stock, comprising 1.6% of its 13F portfolio. Sitting at the No. 2 spot is Sculptor Capital, with a $0.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Sabby Capital allocated the biggest weight to Pareteum Corporation (NASDAQ:TEUM), around 1.56% of its 13F portfolio. Sculptor Capital is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to TEUM.
Now, key hedge funds have jumped into Pareteum Corporation (NASDAQ:TEUM) headfirst. Sabby Capital, managed by Hal Mintz, created the largest position in Pareteum Corporation (NASDAQ:TEUM). Sabby Capital had $2.9 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.2 million investment in the stock during the quarter. The following funds were also among the new TEUM investors: Cliff Asness’s AQR Capital Management and Andrew Weiss’s Weiss Asset Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Pareteum Corporation (NASDAQ:TEUM) but similarly valued. These stocks are Aldeyra Therapeutics Inc (NASDAQ:ALDX), First Community Corporation (NASDAQ:FCCO), Alithya Group inc. (NASDAQ:ALYA), and Aspen Aerogels Inc (NYSE:ASPN). This group of stocks’ market values are similar to TEUM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ALDX | 12 | 46995 | -4 |
| FCCO | 3 | 8389 | -1 |
| ALYA | 5 | 15097 | -1 |
| ASPN | 6 | 17246 | 2 |
| Average | 6.5 | 21932 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $22 million. That figure was $4 million in TEUM’s case. Aldeyra Therapeutics Inc (NASDAQ:ALDX) is the most popular stock in this table. On the other hand First Community Corporation (NASDAQ:FCCO) is the least popular one with only 3 bullish hedge fund positions. Pareteum Corporation (NASDAQ:TEUM) 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately TEUM wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TEUM investors were disappointed as the stock returned -65.9% during the first two months of the fourth 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 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
