The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Spark Networks Inc (NYSE:LOV) based on those filings.
Is Spark Networks Inc (NYSE:LOV) the right pick for your portfolio? Hedge funds are taking a pessimistic view. The number of long hedge fund bets were cut by 1 lately. Our calculations also showed that LOV isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). LOV was in 8 hedge funds’ portfolios at the end of March. There were 9 hedge funds in our database with LOV positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are several signals stock market investors put to use to grade publicly traded companies. Some of the less utilized signals are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the top money managers can beat their index-focused peers by a significant amount (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a look at the recent hedge fund action surrounding Spark Networks Inc (NYSE:LOV).
Hedge fund activity in Spark Networks Inc (NYSE:LOV)
At Q1’s end, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from one quarter earlier. By comparison, 2 hedge funds held shares or bullish call options in LOV a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Matthew Hulsizer’s PEAK6 Capital Management has the most valuable position in Spark Networks Inc (NYSE:LOV), worth close to $5.8 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Osmium Partners, led by John H Lewis, holding a $4.8 million position; 15.3% of its 13F portfolio is allocated to the company. Other members of the smart money that are bullish contain Arnaud Ajdler’s Engine Capital, J. Carlo Cannell’s Cannell Capital and Dan Sobol and Lisa Hess’s SkyTop Capital Management. In terms of the portfolio weights assigned to each position Osmium Partners allocated the biggest weight to Spark Networks Inc (NYSE:LOV), around 15.34% of its 13F portfolio. Engine Capital is also relatively very bullish on the stock, setting aside 0.94 percent of its 13F equity portfolio to LOV.
Because Spark Networks Inc (NYSE:LOV) has experienced falling interest from the entirety of the hedge funds we track, we can see that there is a sect of hedge funds that decided to sell off their full holdings heading into Q4. At the top of the heap, Bradley Louis Radoff’s Fondren Management dumped the largest position of the “upper crust” of funds tracked by Insider Monkey, worth about $0.4 million in stock. Israel Englander’s fund, Millennium Management, also sold off its stock, about $0.1 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 1 funds heading into Q4.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Spark Networks Inc (NYSE:LOV) but similarly valued. We will take a look at ICC Holdings, Inc. (NASDAQ:ICCH), Psychemedics Corp. (NASDAQ:PMD), Pacific Drilling SA (NYSE:PACD), and Gulf Resources, Inc. (NASDAQ:GURE). This group of stocks’ market caps are closest to LOV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ICCH | 3 | 1071 | 0 |
| PMD | 3 | 3437 | -1 |
| PACD | 8 | 22303 | 0 |
| GURE | 1 | 1224 | 0 |
| Average | 3.75 | 7009 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.75 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $15 million in LOV’s case. Pacific Drilling SA (NYSE:PACD) is the most popular stock in this table. On the other hand Gulf Resources, Inc. (NASDAQ:GURE) is the least popular one with only 1 bullish hedge fund positions. Spark Networks Inc (NYSE:LOV) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th but still beat the market by 14.8 percentage points. Hedge funds were also right about betting on LOV as the stock returned 41.5% in Q2 (through June 17th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
