Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Skillsoft Corp. (NYSE:SKIL), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Hedge fund interest in Skillsoft Corp. (NYSE:SKIL) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that SKIL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare SKIL to other stocks including BrightView Holdings, Inc. (NYSE:BV), Cohu, Inc. (NASDAQ:COHU), and Community Health Systems (NYSE:CYH) to get a better sense of its popularity.
Donald Sussman of Paloma Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Keeping this in mind we’re going to go over the latest hedge fund action encompassing Skillsoft Corp. (NYSE:SKIL).
Do Hedge Funds Think SKIL Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2021. By comparison, 0 hedge funds held shares or bullish call options in SKIL a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
Among these funds, Paradice Investment Management held the most valuable stake in Skillsoft Corp. (NYSE:SKIL) , which was worth $131.1 million at the end of the third quarter. On the second spot was Pelham Capital which amassed $50.5 million worth of shares. Archon Capital Management, Corsair Capital Management, and Brahman Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position AREX Capital Management allocated the biggest weight to Skillsoft Corp. (NYSE:SKIL) , around 6.11% of its 13F portfolio. Paradice Investment Management is also relatively very bullish on the stock, setting aside 5.93 percent of its 13F equity portfolio to SKIL.
Due to the fact that Skillsoft Corp. (NYSE:SKIL) has witnessed declining sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of funds that elected to cut their full holdings last quarter. Intriguingly, Alec Litowitz and Ross Laser’s Magnetar Capital said goodbye to the largest stake of all the hedgies monitored by Insider Monkey, valued at about $5.7 million in stock. Donald Sussman’s fund, Paloma Partners, also cut its stock, about $4.2 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Skillsoft Corp. (NYSE:SKIL) but similarly valued. These stocks are BrightView Holdings, Inc. (NYSE:BV), Cohu, Inc. (NASDAQ:COHU), Community Health Systems (NYSE:CYH), MAG Silver Corporation (NYSE:MAG), Yext, Inc. (NYSE:YEXT), Radware Ltd. (NASDAQ:RDWR), and Bionano Genomics, Inc. (NASDAQ:BNGO). All of these stocks’ market caps are closest to SKIL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BV | 9 | 188575 | -1 |
| COHU | 14 | 77605 | -1 |
| CYH | 22 | 245372 | -3 |
| MAG | 13 | 96760 | 0 |
| YEXT | 14 | 24953 | -5 |
| RDWR | 17 | 267737 | -2 |
| BNGO | 14 | 13361 | -3 |
| Average | 14.7 | 130623 | -2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.7 hedge funds with bullish positions and the average amount invested in these stocks was $131 million. That figure was $338 million in SKIL’s case. Community Health Systems (NYSE:CYH) is the most popular stock in this table. On the other hand BrightView Holdings, Inc. (NYSE:BV) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Skillsoft Corp. (NYSE:SKIL) is more popular among hedge funds. Our overall hedge fund sentiment score for SKIL is 85. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Unfortunately SKIL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SKIL were disappointed as the stock returned -8% since the end of the third quarter (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.