Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved dearly, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 20 S&P 500 stocks among hedge funds beat the S&P 500 Index by nearly 10 percentage points so far in 2019. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of TechTarget Inc (NASDAQ:TTGT).
Is TechTarget Inc (NASDAQ:TTGT) a safe stock to buy now? Investors who are in the know are in a pessimistic mood. The number of long hedge fund bets went down by 2 recently. Our calculations also showed that TTGT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most traders, hedge funds are perceived as underperforming, old investment vehicles of years past. While there are greater than 8000 funds with their doors open at the moment, We look at the moguls of this club, about 750 funds. It is estimated that this group of investors orchestrate the lion’s share of the hedge fund industry’s total capital, and by watching their inimitable stock picks, Insider Monkey has discovered many investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points annually since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
John Overdeck of Two Sigma Advisors
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s check out the latest hedge fund action surrounding TechTarget Inc (NASDAQ:TTGT).
Hedge fund activity in TechTarget Inc (NASDAQ:TTGT)
Heading into the fourth quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TTGT over the last 17 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
The largest stake in TechTarget Inc (NASDAQ:TTGT) was held by Nine Ten Partners, which reported holding $19.3 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $17.9 million position. Other investors bullish on the company included Two Sigma Advisors, Portolan Capital Management, and Millennium Management. In terms of the portfolio weights assigned to each position Nine Ten Partners allocated the biggest weight to TechTarget Inc (NASDAQ:TTGT), around 6.11% of its 13F portfolio. Portolan Capital Management is also relatively very bullish on the stock, dishing out 0.36 percent of its 13F equity portfolio to TTGT.
Seeing as TechTarget Inc (NASDAQ:TTGT) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there were a few funds who sold off their positions entirely heading into Q4. Intriguingly, Matthew Hulsizer’s PEAK6 Capital Management dumped the largest stake of all the hedgies followed by Insider Monkey, comprising about $1.2 million in stock, and Benjamin A. Smith’s Laurion Capital Management was right behind this move, as the fund cut about $0.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as TechTarget Inc (NASDAQ:TTGT) but similarly valued. These stocks are Nicolet Bankshares Inc. (NASDAQ:NCBS), Jumia Technologies AG (NYSE:JMIA), Front Yard Residential Corporation (NYSE:RESI), and Organogenesis Holdings Inc. (NASDAQ:ORGO). This group of stocks’ market valuations are closest to TTGT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NCBS | 5 | 9496 | 1 |
| JMIA | 6 | 2284 | -2 |
| RESI | 15 | 34064 | 4 |
| ORGO | 2 | 1103 | 0 |
| Average | 7 | 11737 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $59 million in TTGT’s case. Front Yard Residential Corporation (NYSE:RESI) is the most popular stock in this table. On the other hand Organogenesis Holdings Inc. (NASDAQ:ORGO) is the least popular one with only 2 bullish hedge fund positions. TechTarget Inc (NASDAQ:TTGT) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on TTGT as the stock returned 17.7% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
