Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is ShotSpotter, Inc. (NASDAQ:SSTI), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Hedge fund interest in ShotSpotter, Inc. (NASDAQ:SSTI) shares was flat at the end of last quarter. This is usually a negative indicator. 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 Tsakos Energy Navigation Ltd. (NYSE:TNP), ADMA Biologics Inc (NASDAQ:ADMA), and Bluerock Residential Growth REIT Inc (NYSE:BRG) to gather more data points. Our calculations also showed that SSTI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are a lot of signals shareholders can use to grade stocks. A duo of the most underrated signals are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the elite investment managers can beat their index-focused peers by a healthy margin (see the details here).
Israel Englander of Millennium 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. Keeping this in mind let’s view the fresh hedge fund action regarding ShotSpotter, Inc. (NASDAQ:SSTI).
Hedge fund activity in ShotSpotter, Inc. (NASDAQ:SSTI)
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. By comparison, 5 hedge funds held shares or bullish call options in SSTI a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Mark Broach’s Manatuck Hill Partners has the number one position in ShotSpotter, Inc. (NASDAQ:SSTI), worth close to $5 million, corresponding to 2.8% of its total 13F portfolio. The second most bullish fund manager is Millennium Management, managed by Israel Englander, which holds a $4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish include Marc Majzner’s Clearline Capital, Ken Griffin’s Citadel Investment Group and Renaissance Technologies. In terms of the portfolio weights assigned to each position Manatuck Hill Partners allocated the biggest weight to ShotSpotter, Inc. (NASDAQ:SSTI), around 2.75% of its 13F portfolio. Clearline Capital is also relatively very bullish on the stock, earmarking 0.87 percent of its 13F equity portfolio to SSTI.
Judging by the fact that ShotSpotter, Inc. (NASDAQ:SSTI) has witnessed falling interest from hedge fund managers, we can see that there was a specific group of fund managers that slashed their full holdings in the third quarter. Intriguingly, Richard Driehaus’s Driehaus Capital cut the largest position of the 750 funds monitored by Insider Monkey, comprising about $7.1 million in stock, and Josh Goldberg’s G2 Investment Partners Management was right behind this move, as the fund said goodbye to about $0.9 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as ShotSpotter, Inc. (NASDAQ:SSTI) but similarly valued. These stocks are Tsakos Energy Navigation Ltd. (NYSE:TNP), ADMA Biologics Inc (NASDAQ:ADMA), Bluerock Residential Growth REIT Inc (NYSE:BRG), and Jumei International Holding Ltd (NYSE:JMEI). This group of stocks’ market valuations resemble SSTI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TNP | 7 | 27496 | 1 |
| ADMA | 11 | 105915 | 1 |
| BRG | 13 | 26088 | 2 |
| JMEI | 3 | 8671 | -3 |
| Average | 8.5 | 42043 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $42 million. That figure was $13 million in SSTI’s case. Bluerock Residential Growth REIT Inc (NYSE:BRG) is the most popular stock in this table. On the other hand Jumei International Holding Ltd (NYSE:JMEI) is the least popular one with only 3 bullish hedge fund positions. ShotSpotter, Inc. (NASDAQ:SSTI) is not the least popular stock in this group but hedge fund interest is still below average. 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. A small number of hedge funds were also right about betting on SSTI, though not to the same extent, as the stock returned 6.5% during the first two months of the fourth quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.
