The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Fidus Investment Corp (NASDAQ:FDUS)?
Fidus Investment Corp (NASDAQ:FDUS) investors should pay attention to an increase in activity from the world’s largest hedge funds in recent months. Our calculations also showed that FDUS 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Donald Sussman of Paloma Partners
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 let’s view the fresh hedge fund action encompassing Fidus Investment Corp (NASDAQ:FDUS).
How are hedge funds trading Fidus Investment Corp (NASDAQ:FDUS)?
Heading into the second quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FDUS over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Fidus Investment Corp (NASDAQ:FDUS) was held by Arrowstreet Capital, which reported holding $1.6 million worth of stock at the end of September. It was followed by Two Sigma Advisors with a $0.7 million position. Other investors bullish on the company included McKinley Capital Management, D E Shaw, and Caxton Associates LP. In terms of the portfolio weights assigned to each position McKinley Capital Management allocated the biggest weight to Fidus Investment Corp (NASDAQ:FDUS), around 0.03% of its 13F portfolio. Caxton Associates LP is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to FDUS.
Now, key hedge funds have been driving this bullishness. Caxton Associates LP, managed by Bruce Kovner, established the largest position in Fidus Investment Corp (NASDAQ:FDUS). Caxton Associates LP had $0.1 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also initiated a $0.1 million position during the quarter. The only other fund with a new position in the stock is Ken Griffin’s Citadel Investment Group.
Let’s now review hedge fund activity in other stocks similar to Fidus Investment Corp (NASDAQ:FDUS). We will take a look at Agile Therapeutics Inc (NASDAQ:AGRX), Clearfield, Inc. (NASDAQ:CLFD), GSI Technology, Inc. (NASDAQ:GSIT), and X4 Pharmaceuticals, Inc. (NASDAQ:XFOR). All of these stocks’ market caps resemble FDUS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AGRX | 15 | 38935 | 3 |
| CLFD | 3 | 8200 | -1 |
| GSIT | 6 | 14193 | 1 |
| XFOR | 9 | 43341 | -3 |
| Average | 8.25 | 26167 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $3 million in FDUS’s case. Agile Therapeutics Inc (NASDAQ:AGRX) is the most popular stock in this table. On the other hand Clearfield, Inc. (NASDAQ:CLFD) is the least popular one with only 3 bullish hedge fund positions. Fidus Investment Corp (NASDAQ:FDUS) is not the least popular stock in this group but hedge fund interest is still below 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 and still beat the market by 14.8 percentage points. A small number of hedge funds were also right about betting on FDUS as the stock returned 40% during the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
