With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the first quarter. One of these stocks was Forrester Research, Inc. (NASDAQ:FORR).
Forrester Research, Inc. (NASDAQ:FORR) was in 13 hedge funds’ portfolios at the end of March. FORR shareholders have witnessed an increase in support from the world’s most elite money managers recently. There were 10 hedge funds in our database with FORR holdings at the end of the previous quarter. Our calculations also showed that FORR isn’t among the 30 most popular stocks among hedge funds.
In the eyes of most shareholders, hedge funds are seen as worthless, old investment vehicles of years past. While there are more than 8000 funds in operation today, Our researchers hone in on the aristocrats of this club, about 750 funds. Most estimates calculate that this group of people have their hands on most of the hedge fund industry’s total asset base, and by keeping an eye on their top equity investments, Insider Monkey has figured out various investment strategies that have historically defeated the broader indices. Insider Monkey’s flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let’s take a look at the fresh hedge fund action encompassing Forrester Research, Inc. (NASDAQ:FORR).
What does smart money think about Forrester Research, Inc. (NASDAQ:FORR)?
Heading into the second quarter of 2019, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 30% from one quarter earlier. By comparison, 10 hedge funds held shares or bullish call options in FORR a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Forrester Research, Inc. (NASDAQ:FORR), with a stake worth $38.5 million reported as of the end of March. Trailing Renaissance Technologies was ACK Asset Management, which amassed a stake valued at $9.3 million. Millennium Management, GLG Partners, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.
Now, key money managers have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the most outsized position in Forrester Research, Inc. (NASDAQ:FORR). Arrowstreet Capital had $0.9 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $0.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Cliff Asness’s AQR Capital Management and Roger Ibbotson’s Zebra Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Forrester Research, Inc. (NASDAQ:FORR) but similarly valued. We will take a look at Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), The Gorman-Rupp Company (NYSE:GRC), PetIQ, Inc. (NASDAQ:PETQ), and Par Pacific Holdings, Inc. (NYSE:PARR). This group of stocks’ market valuations are closest to FORR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DCPH | 17 | 216366 | 2 |
| GRC | 7 | 38502 | 0 |
| PETQ | 13 | 86032 | 0 |
| PARR | 16 | 109870 | 0 |
| Average | 13.25 | 112693 | 0.5 |
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 $113 million. That figure was $63 million in FORR’s case. Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH) is the most popular stock in this table. On the other hand The Gorman-Rupp Company (NYSEAMEX:GRC) is the least popular one with only 7 bullish hedge fund positions. Forrester Research, Inc. (NASDAQ:FORR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately FORR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); FORR investors were disappointed as the stock returned -1.7% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
