Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30. In this article we are going to take a look at smart money sentiment towards magicJack VocalTec Ltd (NASDAQ:CALL).
magicJack VocalTec Ltd (NASDAQ:CALL) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 9 hedge funds’ portfolios at the end of September. 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 Planet Payment Inc (NASDAQ:PLPM), RealNetworks Inc (NASDAQ:RNWK), and ESSA Bancorp, Inc. (NASDAQ:ESSA) to gather more data points.
Follow Callwave Inc (NASDAQ:CALL)
Follow Callwave Inc (NASDAQ:CALL)
In today’s marketplace, there are numerous methods investors employ to analyze stocks. A couple of the most under-the-radar methods are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the top investment managers can outperform the S&P 500 by a solid amount (see the details here).
Keeping this in mind, let’s take a look at the new action surrounding magicJack VocalTec Ltd (NASDAQ:CALL).
Hedge fund activity in magicJack VocalTec Ltd (NASDAQ:CALL)
At the end of September, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, flat over the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies hold the most valuable position in magicJack VocalTec Ltd (NASDAQ:CALL). Renaissance Technologies has a $3 million position in the stock, comprising less than 0.1% of its 13F portfolio. Coming in second is T2 Partners, managed by Whitney Tilson, which holds a $2.9 million position; the fund has 5.8% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish include Peter Muller’s PDT Partners, Israel Englander’s Millennium Management, and Paul Solit’s Potomac Capital Management.
We view hedge fund selling in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: LMR Partners. 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 here because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Tudor Investment Corp).
Let’s now review hedge fund activity in other stocks similar to magicJack VocalTec Ltd (NASDAQ:CALL). These stocks are Planet Payment Inc (NASDAQ:PLPM), RealNetworks Inc (NASDAQ:RNWK), ESSA Bancorp, Inc. (NASDAQ:ESSA), and United Online, Inc. (NASDAQ:UNTD). This group of stocks’ market valuations matches magicJack VocalTec Ltd (NASDAQ:CALL)’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PLPM | 10 | 4986 | 4 |
| RNWK | 8 | 37260 | -3 |
| ESSA | 5 | 8959 | 1 |
| UNTD | 16 | 29783 | -2 |
As you can see, these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $11 million in magicJack VocalTec Ltd (NASDAQ:CALL)’s case. United Online, Inc. (NASDAQ:UNTD) is the most popular stock in this table. On the other hand, ESSA Bancorp, Inc. (NASDAQ:ESSA) is the least popular one with only 5 bullish hedge fund positions. magicJack VocalTec Ltd (NASDAQ:CALL) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, United Online, Inc. (NASDAQ:UNTD) might be a better candidate to consider a long position.
