It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 5.2% over the 12-month period ending October 30, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey (as of September 2014) generated a return of 9.5% over the same time span, with 63% of these stocks outperforming the benchmark. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized in the financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Quest Resource Holding Corp (NASDAQ:QRHC).
Hedge fund interest in Quest Resource Holding Corp (NASDAQ:QRHC) shares was flat at the end of the last quarter. Since the stock has lost 44% since the beginning of the year, it could be the case that investors are holding their positions betting on the stock to grow in the long-term. 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 ReachLocal Inc. (NASDAQ:RLOC), Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS), and Support.com, Inc. (NASDAQ:SPRT) to gather more data points.
In the financial world there are a large number of metrics stock traders use to analyze publicly traded companies. Some of the most innovative metrics are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the elite fund managers can beat the market by a solid margin (see the details here).
Keeping this in mind, let’s take a peek at the key action encompassing Quest Resource Holding Corp (NASDAQ:QRHC).
How have hedgies been trading Quest Resource Holding Corp (NASDAQ:QRHC)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Hal Mintz’s Sabby Capital has the largest position in Quest Resource Holding Corp (NASDAQ:QRHC), worth close to $1.8 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Nelson Obus’ Wynnefield Capital, with a $0.8 million position; 0.3% of its 13F portfolio is allocated to the company. Other peers that hold long positions include Ken Brodkowitz and Mike Vermut’s Newland Capital and Alexander Mitchell’s Scopus Asset Management.