“Market volatility has picked up again over the past few weeks. Headlines highlight risks regarding interest rates, the Fed, China, house prices, auto sales, trade wars, and more. Uncertainty abounds. But doesn’t it always? I have no view on whether the recent volatility will continue for a while, or whether the market will be back at all-time highs before we know it. I remain focused on preserving and growing our capital, and continue to believe that the best way to do so is via a value-driven, concentrated, patient approach. I shun consensus holdings, rich valuations, and market fads, in favor of solid, yet frequently off-the-beaten-path, businesses run by excellent, aligned management teams, purchased at deep discounts to intrinsic value,” are the words of Maran Capital’s Dan Roller. His stock picks have been beating the S&P 500 Index handily. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards Mobileiron Inc (NASDAQ:MOBL) and see how it was affected.
Mobileiron Inc (NASDAQ:MOBL) shareholders have witnessed an increase in enthusiasm from smart money in recent months. Our calculations also showed that MOBL isn’t among the 30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We’re going to go over the key hedge fund action encompassing Mobileiron Inc (NASDAQ:MOBL).
What have hedge funds been doing with Mobileiron Inc (NASDAQ:MOBL)?
At the end of the fourth quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in MOBL a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
The largest stake in Mobileiron Inc (NASDAQ:MOBL) was held by Altai Capital, which reported holding $36.5 million worth of stock at the end of December. It was followed by Greenhouse Funds with a $14.6 million position. Other investors bullish on the company included Renaissance Technologies, Hawk Ridge Management, and Millennium Management.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Altai Capital, managed by Rishi Bajaj, Toby Symonds, and Steve Tesoriere, assembled the most outsized position in Mobileiron Inc (NASDAQ:MOBL). Altai Capital had $36.5 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also initiated a $0.3 million position during the quarter. The following funds were also among the new MOBL investors: Phil Frohlich’s Prescott Group Capital Management and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Mobileiron Inc (NASDAQ:MOBL) but similarly valued. We will take a look at Peapack-Gladstone Financial Corp (NASDAQ:PGC), Sierra Wireless, Inc. (NASDAQ:SWIR), CEVA, Inc. (NASDAQ:CEVA), and Navios Maritime Containers L.P. (NASDAQ:NMCI). All of these stocks’ market caps are similar to MOBL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PGC | 15 | 76314 | 0 |
| SWIR | 10 | 38469 | 2 |
| CEVA | 10 | 23018 | 3 |
| NMCI | 4 | 16567 | 4 |
| Average | 9.75 | 38592 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $94 million in MOBL’s case. Peapack-Gladstone Financial Corp (NASDAQ:PGC) is the most popular stock in this table. On the other hand Navios Maritime Containers L.P. (NASDAQ:NMCI) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Mobileiron Inc (NASDAQ:MOBL) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on MOBL, though not to the same extent, as the stock returned 22.7% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
