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 Turtle Beach Corp (NASDAQ:HEAR), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Turtle Beach Corp (NASDAQ:HEAR) the right investment to pursue these days? Money managers were getting more optimistic. The number of long hedge fund bets moved up by 6 recently. Turtle Beach Corp (NASDAQ:HEAR) was in 20 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 14. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that HEAR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 14 hedge funds in our database with HEAR positions at the end of the fourth quarter.
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.
Ken Griffin of Citadel Investment Group
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Do Hedge Funds Think HEAR Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 43% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards HEAR over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Rip Road Capital was the largest shareholder of Turtle Beach Corp (NASDAQ:HEAR), with a stake worth $15.1 million reported as of the end of March. Trailing Rip Road Capital was Harbert Management, which amassed a stake valued at $11.7 million. D E Shaw, Renaissance Technologies, and Citadel Investment Group 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 Harbert Management allocated the biggest weight to Turtle Beach Corp (NASDAQ:HEAR), around 5.54% of its 13F portfolio. Rip Road Capital is also relatively very bullish on the stock, earmarking 4.41 percent of its 13F equity portfolio to HEAR.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Harbert Management, managed by Raymond J. Harbert, established the biggest position in Turtle Beach Corp (NASDAQ:HEAR). Harbert Management had $11.7 million invested in the company at the end of the quarter. Mark Broach’s Manatuck Hill Partners also made a $4 million investment in the stock during the quarter. The other funds with brand new HEAR positions are D. E. Shaw’s D E Shaw, Peter Algert’s Algert Global, and Michael Gelband’s ExodusPoint Capital.
Let’s check out hedge fund activity in other stocks similar to Turtle Beach Corp (NASDAQ:HEAR). These stocks are Clearfield, Inc. (NASDAQ:CLFD), Whitestone REIT (NYSE:WSR), Sierra Bancorp (NASDAQ:BSRR), NexImmune, Inc. (NASDAQ:NEXI), Donegal Group, Inc. (NASDAQ:DGICB), Oncternal Therapeutics, Inc. (NASDAQ:ONCT), and Intrusion Inc. (NASDAQ:INTZ). This group of stocks’ market caps match HEAR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CLFD | 7 | 33133 | -1 |
| WSR | 7 | 12971 | -3 |
| BSRR | 6 | 13602 | -3 |
| NEXI | 12 | 59288 | 12 |
| DGICB | 1 | 241 | 0 |
| ONCT | 9 | 19697 | -3 |
| INTZ | 5 | 5936 | 2 |
| Average | 6.7 | 20695 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.7 hedge funds with bullish positions and the average amount invested in these stocks was $21 million. That figure was $68 million in HEAR’s case. NexImmune, Inc. (NASDAQ:NEXI) is the most popular stock in this table. On the other hand Donegal Group, Inc. (NASDAQ:DGICB) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Turtle Beach Corp (NASDAQ:HEAR) is more popular among hedge funds. Our overall hedge fund sentiment score for HEAR is 90. 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 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Unfortunately HEAR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HEAR were disappointed as the stock returned 5.4% since the end of the first quarter (through 7/16) 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.
Follow Turtle Beach Corp (NASDAQ:HEAR)
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Disclosure: None. This article was originally published at Insider Monkey.
