The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of WidePoint Corporation (NYSE:WYY).
Is WidePoint Corporation (NYSE:WYY) a first-rate investment right now? Prominent investors are getting less bullish. The number of bullish hedge fund bets retreated by 2 in recent months. Our calculations also showed that WYY 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 44 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
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. With all of this in mind we’re going to analyze the fresh hedge fund action regarding WidePoint Corporation (NYSE:WYY).
How are hedge funds trading WidePoint Corporation (NYSE:WYY)?
Heading into the second quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of -40% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in WYY over the last 18 quarters. So, let’s review 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, Nokomis Capital, managed by Brett Hendrickson, holds the number one position in WidePoint Corporation (NYSE:WYY). Nokomis Capital has a $4.7 million position in the stock, comprising 2.2% of its 13F portfolio. On Nokomis Capital’s heels is Renaissance Technologies, with a $0.6 million position; less than 0.1%% of its 13F portfolio is allocated to the company. In terms of the portfolio weights assigned to each position Nokomis Capital allocated the biggest weight to WidePoint Corporation (NYSE:WYY), around 2.25% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.0005 percent of its 13F equity portfolio to WYY.
Seeing as WidePoint Corporation (NYSE:WYY) has experienced falling interest from the smart money, we can see that there was a specific group of money managers who sold off their full holdings heading into Q4. At the top of the heap, Nick Thakore’s Diametric Capital cut the largest investment of the “upper crust” of funds tracked by Insider Monkey, comprising about $0.1 million in stock. Gavin Saitowitz and Cisco J. del Valle’s fund, Springbok Capital, also dropped its stock, about $0.1 million worth. These moves are interesting, as total hedge fund interest fell by 2 funds heading into Q4.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as WidePoint Corporation (NYSE:WYY) but similarly valued. We will take a look at CSI Compressco LP (NASDAQ:CCLP), Zosano Pharma Corp (NASDAQ:ZSAN), OpGen, Inc. (NASDAQ:OPGN), and Shiloh Industries, Inc. (NASDAQ:SHLO). This group of stocks’ market valuations are similar to WYY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CCLP | 2 | 386 | 0 |
| ZSAN | 4 | 892 | 1 |
| OPGN | 1 | 183 | -2 |
| SHLO | 3 | 810 | -2 |
| Average | 2.5 | 568 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.5 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $5 million in WYY’s case. Zosano Pharma Corp (NASDAQ:ZSAN) is the most popular stock in this table. On the other hand OpGen, Inc. (NASDAQ:OPGN) is the least popular one with only 1 bullish hedge fund positions. WidePoint Corporation (NYSE:WYY) 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 7.9% in 2020 through May 22nd but still beat the market by 15.6 percentage points. Hedge funds were also right about betting on WYY as the stock returned 67.6% in Q2 (through May 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
