Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Comtech Telecommunications Corp. (NASDAQ:CMTL) was in 14 hedge funds’ portfolios at the end of the third quarter of 2018. CMTL has experienced a decrease in activity from the world’s largest hedge funds in recent months. There were 15 hedge funds in our database with CMTL holdings at the end of the previous quarter. Our calculations also showed that cmtl isn’t among the 30 most popular stocks among hedge funds.
In the 21st century investor’s toolkit there are many tools shareholders have at their disposal to assess publicly traded companies. Some of the best tools are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the best money managers can outperform their index-focused peers by a solid amount (see the details here).
Let’s go over the key hedge fund action surrounding Comtech Telecommunications Corp. (NASDAQ:CMTL).
How are hedge funds trading Comtech Telecommunications Corp. (NASDAQ:CMTL)?
Heading into the fourth quarter of 2018, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from one quarter earlier. By comparison, 17 hedge funds held shares or bullish call options in CMTL heading into this year. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
Among these funds, Huber Capital Management held the most valuable stake in Comtech Telecommunications Corp. (NASDAQ:CMTL), which was worth $70.7 million at the end of the third quarter. On the second spot was Royce & Associates which amassed $35.5 million worth of shares. Moreover, Renaissance Technologies, Marshall Wace LLP, and G2 Investment Partners Management were also bullish on Comtech Telecommunications Corp. (NASDAQ:CMTL), allocating a large percentage of their portfolios to this stock.
Because Comtech Telecommunications Corp. (NASDAQ:CMTL) has experienced bearish sentiment from the smart money, we can see that there lies a certain “tier” of hedge funds who sold off their entire stakes last quarter. At the top of the heap, Benjamin A. Smith’s Laurion Capital Management cut the largest stake of the 700 funds followed by Insider Monkey, totaling about $0.5 million in stock, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital was right behind this move, as the fund cut about $0 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 1 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to Comtech Telecommunications Corp. (NASDAQ:CMTL). These stocks are Franklin Street Properties Corp. (NYSE:FSP), Lakeland Bancorp, Inc. (NASDAQ:LBAI), Partner Communications Company Ltd (NASDAQ:PTNR), and Homology Medicines, Inc. (NASDAQ:FIXX). This group of stocks’ market caps match CMTL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FSP | 7 | 23067 | 0 |
| LBAI | 12 | 69869 | 0 |
| PTNR | 2 | 13977 | 1 |
| FIXX | 6 | 145544 | -1 |
| Average | 6.75 | 63114 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $63 million. That figure was $150 million in CMTL’s case. Lakeland Bancorp, Inc. (NASDAQ:LBAI) is the most popular stock in this table. On the other hand Partner Communications Company Ltd (NASDAQ:PTNR) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Comtech Telecommunications Corp. (NASDAQ:CMTL) 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. This article was originally published at Insider Monkey.
