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Should Investors Buy the Dip in SharpSpring (SHSP) Stock?

If you are looking for the best ideas for your portfolio you may want to consider some of Greenhaven Road Capital‘s top stock picks. Greenhaven Road Capital, an investment management firm, is bullish on SharpSpring Inc. (NASDAQ:SHSP) stock. In its Q4 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on SharpSpring Inc. (NASDAQ:SHSP) stock. SharpSpring Inc. (NASDAQ:SHSP) is a software company. The stock is down 30.9% since the Greenhaven Road Capital’s pitch in February 2020, which suggests that the investment firm was wrong in its decision. On a year-to-date basis, SharpSpring Inc. (NASDAQ:SHSP) stock has fallen by 23.0%.

On February 15, 2020, Greenhaven Road Capital had released its Q4 2019 Investor Letter. Greenhaven Road Capital said that SharpSpring Inc. (NASDAQ:SHSP) is poised to grow in 2020. This isn’t the first time Greenhaven Road Capital talked about SharpSpring Inc. (NASDAQ:SHSP) favorably either. The investment firm has been a long time SharpSpring Inc. (NASDAQ:SHSP) bull. A year ago we shared Greenhaven Road Capital’s bullish SharpSpring Inc. (NASDAQ:SHSP) thesis in this article.

Greenhaven Road Capital fund returned approximately 2% net in the fourth quarter and approximately 15.5% for 2019. The investment firm noted that its 2019 returns were below its benchmark the Russell 2000 Index.

Let’s take a look at comments made by Greenhaven Road Capital about SharpSpring Inc. (NASDAQ:SHSP) in the letter.

“SharpSpring (SHSP) – Because I am a board member, I will not regularly discuss the particulars of SharpSpring. We may buy or sell shares for reasons as simple as capital coming into or leaving our funds. In December, Greenhaven participated in a capital raise by SharpSpring, taking our ownership to over 10% of the company. The capital allowed SharpSpring to make its first acquisition, Perfect Audience, which allows marketers to “retarget” visitors to their website. The seller of Perfect Audience was Marin Software, which, based on their balance sheet (sub-$10M in cash) and substantial cash burn rate, was likely a forced seller of an asset that will be highly complementary for SharpSpring.

The acquisition of Perfect Audience gives SharpSpring an additional product to sell into its existing base of 2,000+ digital marketing agencies, and it strengthens the core SharpSpring marketing automation product while also providing a large legacy user base into which SharpSpring can sell its other products. The deal made strategic sense and was done at a compelling valuation, so I think our participation was a no-brainer.

Over the course of 2019, I got to know SharpSpring CEO Rick Carlson better as I joined the Board and watched him navigate the Perfect Audience acquisition and aggressively build out his leadership team. Rick has attracted impressive talent, including a CFO who led the sale of his last company to Thomas Bravo for over $1B, a CMO from competitor Pardot (owned by Salesforce), and a Head of Sales from software multinational Sage. Rick is scrappy and creative. It will undoubtedly take time for everything to gel, but the prices we have paid for our shares do not imply any reacceleration of growth or improved economics, for which Rick is clearly trying to lay the groundwork.”

In Q1 2020, the number of bullish hedge fund positions on SharpSpring Inc. (NASDAQ:SHSP) stock decreased by about 29% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with SharpSpring’s upside potential. Our calculations showed that SharpSpring Inc. (NASDAQ:SHSP) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. 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. You can subscribe to our free enewsletter below to receive our stories in your inbox:

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