In this article you are going to find out whether hedge funds think Pareteum Corporation (NASDAQ:TEUM) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Pareteum Corporation (NASDAQ:TEUM) investors should be aware of an increase in activity from the world’s largest hedge funds lately. TEUM was in 3 hedge funds’ portfolios at the end of the first quarter of 2020. There were 1 hedge funds in our database with TEUM holdings at the end of the previous quarter. Our calculations also showed that TEUM 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.
To most market participants, hedge funds are assumed to be slow, outdated investment tools of years past. While there are greater than 8000 funds with their doors open at the moment, Our experts hone in on the bigwigs of this club, about 850 funds. These investment experts shepherd the lion’s share of the hedge fund industry’s total asset base, and by tailing their highest performing picks, Insider Monkey has found numerous investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Israel Englander of Millennium Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s go over the recent hedge fund action surrounding Pareteum Corporation (NASDAQ:TEUM).
Hedge fund activity in Pareteum Corporation (NASDAQ:TEUM)
At Q1’s end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 200% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TEUM over the last 18 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
Among these funds, Sabby Capital held the most valuable stake in Pareteum Corporation (NASDAQ:TEUM), which was worth $0.2 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $0 million worth of shares. Citadel Investment Group was 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 Sabby Capital allocated the biggest weight to Pareteum Corporation (NASDAQ:TEUM), around 0.1% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, dishing out 0 percent of its 13F equity portfolio to TEUM.
As industrywide interest jumped, some big names have been driving this bullishness. Sabby Capital, managed by Hal Mintz, established the largest position in Pareteum Corporation (NASDAQ:TEUM). Sabby Capital had $0.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0 million investment in the stock during the quarter. The only other fund with a new position in the stock is Israel Englander’s Millennium Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Pareteum Corporation (NASDAQ:TEUM) but similarly valued. We will take a look at Riverview Financial Corporation (NASDAQ:RIVE), Randolph Bancorp, Inc. (NASDAQ:RNDB), Goodrich Petroleum Corporation (NYSE:GDP), and Enlivex Therapeutics Ltd. (NASDAQ:ENLV). This group of stocks’ market caps are similar to TEUM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RIVE | 5 | 6121 | -2 |
| RNDB | 2 | 1572 | 0 |
| GDP | 4 | 10519 | 0 |
| ENLV | 2 | 2531 | 1 |
| Average | 3.25 | 5186 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.25 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $0 million in TEUM’s case. Riverview Financial Corporation (NASDAQ:RIVE) is the most popular stock in this table. On the other hand Randolph Bancorp, Inc. (NASDAQ:RNDB) is the least popular one with only 2 bullish hedge fund positions. Pareteum Corporation (NASDAQ:TEUM) 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 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 7.9% in 2020 through May 22nd and surpassed the market by 15.6 percentage points. Unfortunately TEUM wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); TEUM investors were disappointed as the stock returned 7.3% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.
