It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. Since stock returns aren’t usually symmetrically distributed and index returns are more affected by a few outlier stocks (i.e. the FAANG stocks dominating and driving S&P 500 Index’s returns in recent years), more than 50% of the constituents of the Standard and Poor’s 500 Index underperform the benchmark. Hence, if you randomly pick a stock, there is more than 50% chance that you’d fail to beat the market. At the same time, the 20 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey generated an outperformance of 4 percentage points during the first 9 months of 2019. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Mobileiron Inc (NASDAQ:MOBL).
Mobileiron Inc (NASDAQ:MOBL) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 17 hedge funds’ portfolios at the end of the second quarter of 2019. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Impinj, Inc. (NASDAQ:PI), Hanmi Financial Corp (NASDAQ:HAFC), and Myers Industries, Inc. (NYSE:MYE) to gather more data points. Our calculations also showed that MOBL isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are plenty of methods investors put to use to grade stocks. A pair of the best methods are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the elite money managers can outpace their index-focused peers by a significant amount (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a peek at the new hedge fund action encompassing Mobileiron Inc (NASDAQ:MOBL).
What have hedge funds been doing with Mobileiron Inc (NASDAQ:MOBL)?
Heading into the third quarter of 2019, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the first quarter of 2019. By comparison, 12 hedge funds held shares or bullish call options in MOBL a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, Altai Capital held the most valuable stake in Mobileiron Inc (NASDAQ:MOBL), which was worth $49.3 million at the end of the second quarter. On the second spot was Renaissance Technologies which amassed $21.3 million worth of shares. Moreover, ACK Asset Management, Greenhouse Funds, and Arrowstreet Capital were also bullish on Mobileiron Inc (NASDAQ:MOBL), allocating a large percentage of their portfolios to this stock.
Because Mobileiron Inc (NASDAQ:MOBL) has experienced declining sentiment from the smart money, it’s easy to see that there lies a certain “tier” of hedgies that elected to cut their full holdings in the second quarter. Interestingly, David Brown’s Hawk Ridge Management dumped the largest stake of all the hedgies followed by Insider Monkey, comprising close to $9.5 million in stock, and Philip Hempleman’s Ardsley Partners was right behind this move, as the fund said goodbye to about $3.3 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Mobileiron Inc (NASDAQ:MOBL). These stocks are Impinj, Inc. (NASDAQ:PI), Hanmi Financial Corp (NASDAQ:HAFC), Myers Industries, Inc. (NYSE:MYE), and Solaris Oilfield Infrastructure, Inc. (NYSE:SOI). This group of stocks’ market valuations match MOBL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PI | 17 | 188015 | 6 |
| HAFC | 8 | 34892 | -4 |
| MYE | 14 | 112013 | 0 |
| SOI | 14 | 66032 | -2 |
| Average | 13.25 | 100238 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $100 million. That figure was $120 million in MOBL’s case. Impinj, Inc. (NASDAQ:PI) is the most popular stock in this table. On the other hand Hanmi Financial Corp (NASDAQ:HAFC) is the least popular one with only 8 bullish hedge fund positions. Mobileiron Inc (NASDAQ:MOBL) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on MOBL, though not to the same extent, as the stock returned 5.6% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
