Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards EMCORE Corporation (NASDAQ:EMKR) to find out whether there were any major changes in hedge funds’ views.
Is EMCORE Corporation (NASDAQ:EMKR) a buy, sell, or hold? Money managers were getting more optimistic. The number of bullish hedge fund positions went up by 4 in recent months. EMCORE Corporation (NASDAQ:EMKR) was in 19 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 16. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that EMKR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 15 hedge funds in our database with EMKR positions at the end of the fourth quarter.
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Donald Sussman of Paloma Partners
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Do Hedge Funds Think EMKR Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 27% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in EMKR a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Cannell Capital was the largest shareholder of EMCORE Corporation (NASDAQ:EMKR), with a stake worth $18.6 million reported as of the end of March. Trailing Cannell Capital was AIGH Investment Partners, which amassed a stake valued at $18.4 million. Renaissance Technologies, Cinctive Capital Management, and Royce & Associates were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Cannell Capital allocated the biggest weight to EMCORE Corporation (NASDAQ:EMKR), around 4.17% of its 13F portfolio. AIGH Investment Partners is also relatively very bullish on the stock, setting aside 3.87 percent of its 13F equity portfolio to EMKR.
As aggregate interest increased, key money managers were breaking ground themselves. Cinctive Capital Management, managed by Richard SchimeláandáLawrence Sapanski, created the biggest position in EMCORE Corporation (NASDAQ:EMKR). Cinctive Capital Management had $4.3 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital) also made a $1.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Greg Eisner’s Engineers Gate Manager, Donald Sussman’s Paloma Partners, and Bruce Kovner’s Caxton Associates LP.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as EMCORE Corporation (NASDAQ:EMKR) but similarly valued. We will take a look at Oncolytics Biotech, Inc. (NASDAQ:ONCY), Natural Resource Partners LP (NYSE:NRP), Level One Bancorp, Inc. (NASDAQ:LEVL), Gold Resource Corporation (NYSE:GORO), Jowell Global Ltd. (NASDAQ:JWEL), Community Bankers Trust Corp. (NASDAQ:ESXB), and Gencor Industries, Inc. (NASDAQ:GENC). This group of stocks’ market caps are closest to EMKR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ONCY | 2 | 542 | -1 |
| NRP | 1 | 9040 | 0 |
| LEVL | 3 | 1160 | 1 |
| GORO | 6 | 2110 | -1 |
| JWEL | 1 | 279 | 1 |
| ESXB | 6 | 19789 | 1 |
| GENC | 2 | 26276 | -1 |
| Average | 3 | 8457 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $63 million in EMKR’s case. Gold Resource Corporation (NYSE:GORO) is the most popular stock in this table. On the other hand Natural Resource Partners LP (NYSE:NRP) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks EMCORE Corporation (NASDAQ:EMKR) is more popular among hedge funds. Our overall hedge fund sentiment score for EMKR is 89. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 23.8% in 2021 through July 16th but still managed to beat the market by 7.7 percentage points. Hedge funds were also right about betting on EMKR as the stock returned 50% since the end of March (through 7/16) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Follow Emcore Corp (NASDAQ:EMKR)
Follow Emcore Corp (NASDAQ:EMKR)
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Disclosure: None. This article was originally published at Insider Monkey.
