Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of PowerFleet, Inc. (NASDAQ:PWFL) based on that data and determine whether they were really smart about the stock.
Is PowerFleet, Inc. (NASDAQ:PWFL) a healthy stock for your portfolio? Investors who are in the know were getting less optimistic. The number of long hedge fund positions were trimmed by 3 in recent months. Our calculations also showed that PWFL 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.
According to most market participants, hedge funds are viewed as underperforming, old financial tools of yesteryear. While there are greater than 8000 funds trading at present, We choose to focus on the moguls of this club, around 850 funds. It is estimated that this group of investors preside over the majority of the hedge fund industry’s total capital, and by tracking their finest equity investments, Insider Monkey has revealed many investment strategies that have historically exceeded Mr. Market. Insider Monkey’s flagship short hedge fund strategy outrun 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 .
Philip Hempleman of Ardsley Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to go over the latest hedge fund action surrounding PowerFleet, Inc. (NASDAQ:PWFL).
How are hedge funds trading PowerFleet, Inc. (NASDAQ:PWFL)?
Heading into the second quarter of 2020, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PWFL over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Cannell Capital held the most valuable stake in PowerFleet, Inc. (NASDAQ:PWFL), which was worth $9.6 million at the end of the third quarter. On the second spot was North Run Capital which amassed $4.7 million worth of shares. Ardsley Partners, Renaissance Technologies, and Millennium Management 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 North Run Capital allocated the biggest weight to PowerFleet, Inc. (NASDAQ:PWFL), around 4.93% of its 13F portfolio. Cannell Capital is also relatively very bullish on the stock, designating 4 percent of its 13F equity portfolio to PWFL.
Due to the fact that PowerFleet, Inc. (NASDAQ:PWFL) has faced falling interest from hedge fund managers, we can see that there exists a select few hedgies that elected to cut their entire stakes last quarter. At the top of the heap, Charles Frumberg’s Emancipation Capital cut the largest position of the 750 funds watched by Insider Monkey, totaling close to $11.2 million in stock. Constantinos J. Christofilis’s fund, Archon Capital Management, also dropped its stock, about $5.8 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 3 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as PowerFleet, Inc. (NASDAQ:PWFL) but similarly valued. We will take a look at InflaRx N.V. (NASDAQ:IFRX), Danaos Corporation (NYSE:DAC), GlycoMimetics, Inc. (NASDAQ:GLYC), and Sientra Inc (NASDAQ:SIEN). This group of stocks’ market valuations are similar to PWFL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IFRX | 9 | 15958 | 3 |
| DAC | 6 | 8980 | 0 |
| GLYC | 13 | 28346 | 1 |
| SIEN | 9 | 19799 | -6 |
| Average | 9.25 | 18271 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $21 million in PWFL’s case. GlycoMimetics, Inc. (NASDAQ:GLYC) is the most popular stock in this table. On the other hand Danaos Corporation (NYSE:DAC) is the least popular one with only 6 bullish hedge fund positions. PowerFleet, Inc. (NASDAQ:PWFL) is not the most popular stock in this group but hedge fund interest is still above average. 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 12.3% in 2020 through June 30th but still beat the market by 15.5 percentage points. Hedge funds were also right about betting on PWFL as the stock returned 33.5% in Q2 and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
