With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was KVH Industries, Inc. (NASDAQ:KVHI).
KVH Industries, Inc. (NASDAQ:KVHI) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that KVHI 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 KVHI to other stocks including Tiptree Inc. (NASDAQ:TIPT), Oil States International, Inc. (NYSE:OIS), and Sol-Gel Technologies Ltd. (NASDAQ:SLGL) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most stock holders, hedge funds are assumed to be worthless, old investment vehicles of the past. While there are more than 8000 funds in operation at present, Our researchers hone in on the top tier of this group, approximately 850 funds. These money managers orchestrate bulk of all hedge funds’ total capital, and by keeping an eye on their matchless equity investments, Insider Monkey has spotted several investment strategies that have historically outrun the broader indices. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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 10 most profitable companies in the world 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. Keeping this in mind we’re going to take a glance at the key hedge fund action encompassing KVH Industries, Inc. (NASDAQ:KVHI).
What does smart money think about KVH Industries, Inc. (NASDAQ:KVHI)?
Heading into the fourth quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards KVHI over the last 21 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the largest position in KVH Industries, Inc. (NASDAQ:KVHI), worth close to $3.3 million, accounting for less than 0.1%% of its total 13F portfolio. The second largest stake is held by VIEX Capital Advisors, led by Eric Singer, holding a $0.8 million position; 0.7% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, David Harding’s Winton Capital Management and . In terms of the portfolio weights assigned to each position VIEX Capital Advisors allocated the biggest weight to KVH Industries, Inc. (NASDAQ:KVHI), around 0.74% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to KVHI.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Portolan Capital Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was VIEX Capital Advisors).
Let’s now take a look at hedge fund activity in other stocks similar to KVH Industries, Inc. (NASDAQ:KVHI). We will take a look at Tiptree Inc. (NASDAQ:TIPT), Oil States International, Inc. (NYSE:OIS), Sol-Gel Technologies Ltd. (NASDAQ:SLGL), Universal Technical Institute, Inc. (NYSE:UTI), Eton Pharmaceuticals, Inc. (NASDAQ:ETON), Grupo Supervielle S.A. (NYSE:SUPV), and GP Strategies Corporation (NYSE:GPX). This group of stocks’ market valuations match KVHI’s market valuation.
|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 6.7 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $5 million in KVHI’s case. Universal Technical Institute, Inc. (NYSE:UTI) is the most popular stock in this table. On the other hand Sol-Gel Technologies Ltd. (NASDAQ:SLGL) is the least popular one with only 2 bullish hedge fund positions. KVH Industries, Inc. (NASDAQ:KVHI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KVHI is 26.7. 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 November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on KVHI as the stock returned 15.4% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.