Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Everspin Technologies, Inc. (NASDAQ:MRAM) changed recently.
Hedge fund interest in Everspin Technologies, Inc. (NASDAQ:MRAM) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that MRAM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare MRAM to other stocks including Ocean Bio-Chem, Inc. (NASDAQ:OBCI), Caladrius Biosciences Inc (NASDAQ:CLBS), and Allied Esports Entertainment, Inc. (NASDAQ:AESE) to get a better sense of its popularity.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Peter Algert of Algert Global
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we’re going to analyze the latest hedge fund action surrounding Everspin Technologies, Inc. (NASDAQ:MRAM).
Do Hedge Funds Think MRAM Is A Good Stock To Buy Now?
At the end of March, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 5 hedge funds with a bullish position in MRAM a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Everspin Technologies, Inc. (NASDAQ:MRAM) was held by Renaissance Technologies, which reported holding $1.1 million worth of stock at the end of December. It was followed by Two Sigma Advisors with a $0.4 million position. Other investors bullish on the company included D E Shaw, PDT Partners, and Algert Global. In terms of the portfolio weights assigned to each position Algert Global allocated the biggest weight to Everspin Technologies, Inc. (NASDAQ:MRAM), around 0.04% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to MRAM.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Royce & Associates. 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 PDT Partners).
Let’s go over hedge fund activity in other stocks similar to Everspin Technologies, Inc. (NASDAQ:MRAM). We will take a look at Ocean Bio-Chem, Inc. (NASDAQ:OBCI), Caladrius Biosciences Inc (NASDAQ:CLBS), Allied Esports Entertainment, Inc. (NASDAQ:AESE), Regulus Therapeutics Inc (NASDAQ:RGLS), Beyond Air, Inc. (NASDAQ:XAIR), Evolution Petroleum Corporation (NYSE:EPM), and Blue Apron Holdings, Inc. (NYSE:APRN). This group of stocks’ market valuations match MRAM’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OBCI | 3 | 5377 | -1 |
| CLBS | 5 | 3949 | 2 |
| AESE | 2 | 414 | 0 |
| RGLS | 6 | 14908 | 2 |
| XAIR | 5 | 6015 | 1 |
| EPM | 9 | 10311 | -1 |
| APRN | 9 | 3349 | 1 |
| Average | 5.6 | 6332 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.6 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $2 million in MRAM’s case. Evolution Petroleum Corporation (NYSE:EPM) is the most popular stock in this table. On the other hand Allied Esports Entertainment, Inc. (NASDAQ:AESE) is the least popular one with only 2 bullish hedge fund positions. Everspin Technologies, Inc. (NASDAQ:MRAM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MRAM is 51.4. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th and beat the market by 6.1 percentage points. A small number of hedge funds were also right about betting on MRAM, though not to the same extent, as the stock returned 9% since the end of Q1 (through June 18th) and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.
