In this article we will take a look at whether hedge funds think Boingo Wireless Inc (NASDAQ:WIFI) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Boingo Wireless Inc (NASDAQ:WIFI) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 15 hedge funds’ portfolios at the end of September. Our calculations also showed that WIFI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare WIFI to other stocks including Tricida, Inc. (NASDAQ:TCDA), Blucora Inc (NASDAQ:BCOR), and Camden National Corporation (NASDAQ:CAC) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind we’re going to take a look at the key hedge fund action surrounding Boingo Wireless Inc (NASDAQ:WIFI).
Do Hedge Funds Think WIFI Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards WIFI over the last 21 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Lynrock Lake held the most valuable stake in Boingo Wireless Inc (NASDAQ:WIFI), which was worth $134.9 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $26.4 million worth of shares. Headlands Capital, Legion Partners Asset Management, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Headlands Capital allocated the biggest weight to Boingo Wireless Inc (NASDAQ:WIFI), around 14.56% of its 13F portfolio. Lynrock Lake is also relatively very bullish on the stock, designating 10.04 percent of its 13F equity portfolio to WIFI.
Because Boingo Wireless Inc (NASDAQ:WIFI) has witnessed declining sentiment from the entirety of the hedge funds we track, we can see that there is a sect of hedge funds that decided to sell off their positions entirely by the end of the third quarter. Interestingly, Mark Coe’s Intrinsic Edge Capital dumped the largest stake of the 750 funds monitored by Insider Monkey, worth about $6.7 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also said goodbye to its stock, about $0.7 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Boingo Wireless Inc (NASDAQ:WIFI). We will take a look at Tricida, Inc. (NASDAQ:TCDA), Blucora Inc (NASDAQ:BCOR), Camden National Corporation (NASDAQ:CAC), Donnelley Financial Solutions, Inc. (NYSE:DFIN), WideOpenWest, Inc. (NYSE:WOW), Juniper Industrial Holdings, Inc. (NYSE:JIH), and Cowen Inc. (NASDAQ:COWN). All of these stocks’ market caps match WIFI’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.1 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $190 million in WIFI’s case. Juniper Industrial Holdings, Inc. (NYSE:JIH) is the most popular stock in this table. On the other hand WideOpenWest, Inc. (NYSE:WOW) is the least popular one with only 9 bullish hedge fund positions. Boingo Wireless Inc (NASDAQ:WIFI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WIFI is 50.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on WIFI as the stock returned 32.1% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.