Many retail investors seeking to invest in the hedge fund industry may not have the necessary amount of capital to do so, but they can easily track hedge funds’ moves by examining their 13G, 13D, and Form 4 filings, as well as their quarterly 13F filings. The average hedge fund was down by approximately 3% through the end of the first quarter, whereas the S&P 500 gained roughly 1% over the same time span. While it does not seem like monitoring hedge funds’ moves would be a great idea at this point in time, knowing what a specific segment of the hedge fund industry thinks of certain companies can still come in handy for investors. For that reason, the following article will digest four SEC filings submitted by several widely-known hedge fund vehicles, including Starboard Value and Tiger Global Management.
At Insider Monkey, we track around 785 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
In a freshly-amended 13D filing, Jeffrey Smith’s Starboard Value L.P. reported ownership of 40.55 million shares of Quantum Corp (NYSE:QTM), which constitute 14.2% of the company’s outstanding shares. This represents a decrease from the stake of 42.28 million shares disclosed in Starboard’s previous 13D filing on the company, submitted with the SEC at the end of January. More importantly, the public filing reveals that Mr. Smith’s activist hedge fund exercised its replacement rights in connection with a settlement agreement reached in July 2014, using them to recommend that Clifford Press be appointed to the company’s Board of Directors, after Philip Black, who was appointed to the Board pursuant to the 2014 settlement agreement, stepped down. In a public announcement dated April 5, the expert in scale-out storage, archive and data protection announced the appointment on Mr. Press to the Board. Meanwhile, billionaire Jeffrey Smith is no longer a member of Quantum Corp (NYSE:QTM)’s Board, after having served as a Director from May 2013 through May 2015.
Quantum Corp’s total revenue for the nine months that ended December 31 came in at $355.93 million, which was down from $405.30 million reported for the same period of the prior year. Quantum’s 2015 top-line results reflect a decrease in revenue from branded and original equipment manufacturers (OEM) tape automation systems, media, service and disk backup systems, which was offset by higher revenue from scale-out storage solutions. Shares of Quantum are down by 60% over the past year and are 37% in the red in 2016. There were 14 money managers in our database with stakes in the company at the end of 2015, with them having accumulated almost 26% of its outstanding shares. George Soros’ Soros Fund Management owns a notably smaller stake in Quantum Corp (NYSE:QTM) as of the end of 2015, consisting of 8.85 million shares.
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On the next two pages of this article we’ll discuss three separate SEC filings submitted by funds tracked by Insider Monkey.