It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Rightside Group Ltd (NASDAQ:NAME) .
Rightside Group Ltd (NASDAQ:NAME) investors should pay attention to an increase in activity from the world’s largest hedge funds recently. There were 6 hedge funds in our database with NAME holdings at the end of the previous quarter. At the end of this article we will also compare NAME to other stocks including AcelRx Pharmaceuticals Inc (NASDAQ:ACRX), Westport Innovations Inc. (USA) (NASDAQ:WPRT), and T2 Biosystems Inc (NASDAQ:TTOO) 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.
everything possible/Shutterstock.com
With all of this in mind, we’re going to take a look at the fresh action encompassing Rightside Group Ltd (NASDAQ:NAME).
What does the smart money think about Rightside Group Ltd (NASDAQ:NAME)?
Heading into the fourth quarter of 2016, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 67% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in NAME over the last 5 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, J. Carlo Cannell of Cannell Capital holds the most valuable position in Rightside Group Ltd (NASDAQ:NAME). According to regulatory filings, the fund has a $15.3 million position in the stock, comprising 6.1% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, one of the largest hedge funds in the world, with a $4.8 million position. Remaining hedge funds and institutional investors that hold long positions comprise Jeffrey Jacobowitz’s Simcoe Capital Management, D. E. Shaw’s D E Shaw and William Charters and Mario Marcon’s Sabal Capital Management. 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, key money managers were leading the bulls’ herd. Simcoe Capital Management created the most outsized position in Rightside Group Ltd (NASDAQ:NAME). According to its latest 13F filing, the fund had $0.8 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $0.4 million investment in the stock during the quarter. The other funds with brand new NAME positions are Israel Englander’s Millennium Management, Mike Vranos’ Ellington, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Rightside Group Ltd (NASDAQ:NAME) but similarly valued. These stocks are AcelRx Pharmaceuticals Inc (NASDAQ:ACRX), Westport Innovations Inc. (USA) (NASDAQ:WPRT), T2 Biosystems Inc (NASDAQ:TTOO), and Southern First Bancshares, Inc. (NASDAQ:SFST). This group of stocks’ market valuations are closest to NAME’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ACRX | 6 | 28945 | -3 |
| WPRT | 6 | 8301 | -1 |
| TTOO | 6 | 49795 | 1 |
| SFST | 6 | 22351 | 0 |
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $23 million in NAME’s case. All stocks had the same number of hedge fund long positions at the end of the quarter. Compared to these stocks Rightside Group Ltd (NASDAQ:NAME) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
