Here is What Hedge Funds Think About TechTarget Inc (TTGT)

The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at TechTarget Inc (NASDAQ:TTGT) from the perspective of those successful funds.

TechTarget Inc (NASDAQ:TTGT) was in 13 hedge funds’ portfolios at the end of September. TTGT has seen an increase in activity from the world’s largest hedge funds of late. There were 11 hedge funds in our database with TTGT holdings at the end of the previous quarter. At the end of this article we will also compare TTGT to other stocks including CRA International, Inc. (NASDAQ:CRAI), Zix Corporation (NASDAQ:ZIXI), and Invivo Therapeutics Holdings Corp (NASDAQ:NVIV) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Now, let’s review the recent action surrounding TechTarget Inc (NASDAQ:TTGT).

Hedge fund activity in TechTarget Inc (NASDAQ:TTGT)

At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a boost of 18% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TTGT over the last 5 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Brian Bares, Russell Mollen, and James Bradshaw’s Nine Ten Partners has the biggest position in TechTarget Inc (NASDAQ:TTGT), worth close to $23.8 million, corresponding to 8.2% of its total 13F portfolio. The second largest stake is held by Trigran Investments, led by Douglas T. Granat, which holds a $21.2 million position; the fund has 5.5% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish include Jeffrey Jacobowitz’s Simcoe Capital Management, Amy Minella’s Cardinal Capital and David Park’s Headlands Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As aggregate interest increased, specific money managers have been driving this bullishness. Headlands Capital, led by David Park, created the biggest position in TechTarget Inc (NASDAQ:TTGT). According to regulatory filings, the fund had $7.1 million invested in the company at the end of the quarter. John W. Rogers’s Ariel Investments also initiated a $4.1 million position during the quarter. The only other fund with a brand new TTGT position is Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s now take a look at hedge fund activity in other stocks similar to TechTarget Inc (NASDAQ:TTGT). We will take a look at CRA International, Inc. (NASDAQ:CRAI), Zix Corporation (NASDAQ:ZIXI), Invivo Therapeutics Holdings Corp (NASDAQ:NVIV), and Diana Shipping Inc. (NYSE:DSX). This group of stocks’ market values are closest to TTGT’s market value.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $80 million in TTGT’s case. CRA International, Inc. (NASDAQ:CRAI) is the most popular stock in this table. On the other hand Invivo Therapeutics Holdings Corp (NASDAQ:NVIV) is the least popular one with only 4 bullish hedge fund positions. TechTarget Inc (NASDAQ:TTGT) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CRAI might be a better candidate to consider taking a long position in.

Disclosure: none.