Hedge funds are not perfect. They have their bad picks just like everyone else. Micron, a stock hedge funds have loved, lost 50% during the last 12 months ending on October 30. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% in the same time period, vs. a gain of 5.2% for the S&P 500 Index. Because hedge funds have a lot of resources, and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Brightcove Inc (NASDAQ:BCOV).
Brightcove Inc (NASDAQ:BCOV) shareholders have witnessed a decrease in hedge fund interest recently. At the end of this article, we will also compare BCOV to other stocks including Richmont Mines Inc. (USA) (NYSEAMEX:RIC), Biotie Therapies Oyj (ADR) (NASDAQ:BITI), and New York & Company, Inc. (NYSE:NWY) to get a better sense of its popularity.
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In the financial world there are a large number of indicators market participants put to use to evaluate publicly traded companies. A pair of the most useful indicators is composed of hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the elite investment managers can outpace their index-focused peers by a very impressive margin (see the details here).
Keeping this in mind, let’s review the new action surrounding Brightcove Inc (NASDAQ:BCOV).
Hedge fund activity in Brightcove Inc (NASDAQ:BCOV)
At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management has the number one position in Brightcove Inc (NASDAQ:BCOV), worth close to $4.9 million, corresponding to 0.7% of its total 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $1.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism contain Tom Henwood’s OMT Capital Management, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.
Due to the fact that Brightcove Inc (NASDAQ:BCOV) has faced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of hedge funds that elected to cut their positions entirely by the end of the third quarter. It’s worth mentioning that Matthew Hulsizer’s PEAK6 Capital Management dropped the largest stake of the 700 funds followed by Insider Monkey, totaling close to $0.4 million in stock, and Chao Ku’s Nine Chapters Capital Management was right behind this move, as the fund cut about $0.3 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 1 fund by the end of the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Brightcove Inc (NASDAQ:BCOV) but similarly valued. We will take a look at Richmont Mines Inc. (USA) (NYSEAMEX:RIC), Biotie Therapies Oyj (ADR) (NASDAQ:BITI), New York & Company, Inc. (NYSE:NWY), and Westport Innovations Inc. (USA) (NASDAQ:WPRT). This group of stocks’ market valuations are similar to BCOV’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RIC | 4 | 8796 | -1 |
| BITI | 6 | 26594 | -2 |
| NWY | 14 | 22630 | -1 |
| WPRT | 7 | 2875 | 1 |
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $14 million in BCOV’s case. New York & Company, Inc. (NYSE:NWY)) is the most popular stock in this table, while Richmont Mines Inc. (USA) (NYSEAMEX:RIC) is the least popular one. In comparison Brightcove Inc (NASDAQ:BCOV) has the same number of bullish hedge fund positions as the most popular stock in the group – New York & Company, Inc. (NYSE:NWY). Although, this may indicate that this stock represents a good buying opportunity, further and more detailed research is needed.
