Should Your Portfolio Consider Doing the Tangoe Inc (TNGO)?

There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Tangoe Inc (NASDAQ:TNGO).

Is Tangoe Inc (NASDAQ:TNGO) a splendid investment right now? The smart money is actually buying. The number of long hedge fund positions that are disclosed in regulatory 13F filings advanced by 1 in recent months. 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 Permian Basin Royalty Trust (NYSE:PBT), Syros Pharmaceuticals Inc (NASDAQ:SYRS), and Seadrill Partners LLC (NYSE:SDLP) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

What have hedge funds been doing with Tangoe Inc (NASDAQ:TNGO)?

At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a boost of 9% from one quarter earlier, pushing hedge fund ownership back to its yearly high. The graph below displays the number of hedge funds with bullish position in TNGO over the last 5 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Sagard Capital Partners Management Corp, led by Dan Friedberg, holds the largest position in Tangoe Inc (NASDAQ:TNGO). Sagard Capital Partners Management Corp has a $10.3 million position in the stock, comprising 3.8% of its 13F portfolio. The second most bullish fund manager is Nokomis Capital, led by Brett Hendrickson, holding a $6.3 million position; 1.3% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism contain Renaissance Technologies, one of the largest hedge funds in the world, Amish Mehta’s SQN Investors, and Israel Englander’s Millennium Management. We should note that SQN Investors is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Consequently, key hedge funds have been driving this bullishness. SQN Investors assembled the largest position in Tangoe Inc (NASDAQ:TNGO). SQN Investors had $1.8 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also initiated a $0.1 million position during the quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Tangoe Inc (NASDAQ:TNGO). These stocks are Permian Basin Royalty Trust (NYSE:PBT), Syros Pharmaceuticals Inc (NASDAQ:SYRS), Seadrill Partners LLC (NYSE:SDLP), and American Software, Inc. (NASDAQ:AMSWA). All of these stocks’ market caps match TNGO’s market cap.

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $26 million in TNGO’s case. Permian Basin Royalty Trust (NYSE:PBT) is the most popular stock in this table. On the other hand American Software, Inc. (NASDAQ:AMSWA) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Tangoe Inc (NASDAQ:TNGO) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None