There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Forrester Research, Inc. (NASDAQ:FORR).
Is Forrester Research, Inc. (NASDAQ:FORR) a splendid stock to buy now? Money managers seem to be more optimistic. Among the funds in our database, the number of bullish hedge fund positions inched up by one during the third quarter. At the end of this article we will also compare FORR to other stocks including PC Connection, Inc. (NASDAQ:CNXN), Renren Inc (NYSE:RENN), and SunCoke Energy Partners LP (NYSE:SXCP) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, let’s check out the fresh action regarding Forrester Research, Inc. (NASDAQ:FORR).
Hedge fund activity in Forrester Research, Inc. (NASDAQ:FORR)
At the end of the third quarter, nine funds tracked by Insider Monkey were bullish on this stock, up by 13% from the previous quarter. There also were nine funds with a bullish position in FORR at the beginning of this year. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, P2 Capital Partners, led by Claus Moller, holds the most valuable position in Forrester Research, Inc. (NASDAQ:FORR). P2 Capital Partners has a $43.8 million position in the stock, comprising 6.9% of its 13F portfolio. On P2 Capital Partners’s heels is Renaissance Technologies, one of the largest hedge funds in the world, holding a $20.8 million position. Remaining members of the smart money with similar optimism include Israel Englander’s Millennium Management, Chuck Royce’s Royce & Associates, and Ken Griffin’s Citadel Investment Group. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital established the biggest position in Forrester Research, Inc. (NASDAQ:FORR). Arrowstreet Capital had $0.6 million invested in the company at the end of the quarter. Cliff Asness’ AQR Capital Management also initiated a $0.2 million position during the quarter.
Let’s also examine hedge fund activity in other stocks similar to Forrester Research, Inc. (NASDAQ:FORR). These stocks are PC Connection, Inc. (NASDAQ:CNXN), Renren Inc (NYSE:RENN), SunCoke Energy Partners LP (NYSE:SXCP), and Greenhill & Co., Inc. (NYSE:GHL). This group of stocks’ market caps resemble FORR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNXN | 12 | 60820 | 2 |
| RENN | 6 | 2585 | 2 |
| SXCP | 3 | 4445 | -2 |
| GHL | 16 | 106468 | 6 |
As you can see these stocks had an average of nine funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $71 million in FORR’s case. Greenhill & Co., Inc. (NYSE:GHL) is the most popular stock in this table. On the other hand SunCoke Energy Partners LP (NYSE:SXCP) is the least popular one with only three bullish hedge fund positions. Forrester Research, Inc. (NASDAQ:FORR) registered the same number of investors holding shares as the average value for its market cap peers. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard GHL might be a better candidate to consider taking a long position in.
Disclosure: None
