Is Exela Technologies, Inc. (NASDAQ:XELA) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. They sometimes fail miserably but historically their consensus stock picks outperformed the market after adjusting for known risk factors.
Exela Technologies, Inc. (NASDAQ:XELA) investors should pay attention to a decrease in hedge fund interest in recent months. XELA was in 14 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with XELA holdings at the end of the previous quarter. Our calculations also showed that XELA isn’t among the 30 most popular stocks among hedge funds.
At the moment there are many gauges stock traders have at their disposal to evaluate their stock investments. Two of the less utilized gauges are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can beat their index-focused peers by a significant margin (see the details here).
We’re going to go over the fresh hedge fund action surrounding Exela Technologies, Inc. (NASDAQ:XELA).
What does the smart money think about Exela Technologies, Inc. (NASDAQ:XELA)?
At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from the previous quarter. By comparison, 8 hedge funds held shares or bullish call options in XELA heading into this year. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
The largest stake in Exela Technologies, Inc. (NASDAQ:XELA) was held by Greenlight Capital, which reported holding $59.8 million worth of stock at the end of September. It was followed by Nantahala Capital Management with a $47.5 million position. Other investors bullish on the company included Gates Capital Management, York Capital Management, and Scoggin.
Because Exela Technologies, Inc. (NASDAQ:XELA) has experienced falling interest from the smart money, logic holds that there lies a certain “tier” of funds who sold off their positions entirely in the third quarter. Intriguingly, Gifford Combs’s Dalton Investments said goodbye to the largest stake of the 700 funds followed by Insider Monkey, valued at close to $0.9 million in stock, and Leon Cooperman’s Omega Advisors was right behind this move, as the fund sold off about $0.7 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Exela Technologies, Inc. (NASDAQ:XELA) but similarly valued. We will take a look at Lindsay Corporation (NYSE:LNN), Meta Financial Group Inc. (NASDAQ:CASH), Nuveen Credit Strategies Income Fund (NYSE:JQC), and NV5 Global, Inc. (NASDAQ:NVEE). This group of stocks’ market values resemble XELA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LNN | 8 | 236346 | -1 |
| CASH | 15 | 106195 | -3 |
| JQC | 5 | 71933 | -2 |
| NVEE | 13 | 54179 | 5 |
| Average | 10.25 | 117163 | -0.25 |
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As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $117 million. That figure was $192 million in XELA’s case. Meta Financial Group Inc. (NASDAQ:CASH) is the most popular stock in this table. On the other hand Nuveen Credit Strategies Income Fund (NYSE:JQC) is the least popular one with only 5 bullish hedge fund positions. Exela Technologies, Inc. (NASDAQ:XELA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CASH might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.