The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards ChannelAdvisor Corp (NYSE:ECOM).
After shares declined by 17% during the third quarter, smart money found an attractive entry point into ChannelAdvisor Corp (NYSE:ECOM), which experienced an increase in enthusiasm from smart money, with 2 more firms in our database holding the stock by the end of the quarter. They’ve been well rewarded for their bullishness, as shares have risen by over 30% in the fourth quarter. At the end of this article we will also compare ECOM to other stocks including Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS), Papa Murphy’s Holdings Inc (NASDAQ:FRSH), and Millennial Media, Inc. (NYSE:MM) to get a better sense of its popularity.
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In the 21st century investor’s toolkit there are a lot of methods stock market investors use to size up publicly traded companies. A duo of the most useful methods are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the elite fund managers can outclass the market by a very impressive margin (see the details here).
Keeping this in mind, let’s go over the new action regarding ChannelAdvisor Corp (NYSE:ECOM).
Hedge fund activity in ChannelAdvisor Corp (NYSE:ECOM)
Heading into Q4, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 40% jump from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes substantially (or had already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Proxima Capital Management, managed by Youlia Miteva, holds the biggest position in ChannelAdvisor Corp (NYSE:ECOM). Proxima Capital Management has a $6.9 million position in the stock, comprising 1.7% of its 13F portfolio. Sitting in the 2 spot is Millennium Management, led by Israel Englander, holding a $3.6 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions consist of D E Shaw, Ken Griffin’s Citadel Investment Group, and Renaissance Technologies.
Now, key hedge funds were leading the bulls’ herd. Renaissance Technologies created the most outsized position in ChannelAdvisor Corp (NYSE:ECOM). Renaissance Technologies had $0.8 million invested in the company at the end of the quarter. Paul Hondros’ AlphaOne Capital Partners also initiated a $0.2 million position during the quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as ChannelAdvisor Corp (NYSE:ECOM) but similarly valued. We will take a look at Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS), Papa Murphy’s Holdings Inc (NASDAQ:FRSH), Millennial Media, Inc. (NYSE:MM), and Organovo Holdings Inc (NYSEMKT:ONVO). This group of stocks’ market caps are similar to ECOM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KTOS | 7 | 35211 | -2 |
| FRSH | 8 | 16651 | -2 |
| MM | 11 | 28203 | 5 |
| ONVO | 9 | 7822 | -4 |
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $22 million. That figure was $15 million in ECOM’s case. Millennial Media, Inc. (NYSE:MM) is the most popular stock in this table. On the other hand Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks ChannelAdvisor Corp (NYSE:ECOM) is only as popular as KTOS and has less money invested in it. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t really behind this stock yet, though it’s growing more bullish.
