A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on QuinStreet Inc (NASDAQ:QNST) .
Hedge fund interest in QuinStreet Inc (NASDAQ:QNST) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare QNST to other stocks including Ocean Rig UDW Inc (NASDAQ:ORIG), Twin Disc, Incorporated (NASDAQ:TWIN), and Talend SA ADR (NASDAQ:TLND) to get a better sense of its popularity.
Follow Quinstreet Inc (NASDAQ:QNST)
Follow Quinstreet Inc (NASDAQ:QNST)
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
Jirsak/Shutterstock.com
Now, let’s analyze the new action regarding QuinStreet Inc (NASDAQ:QNST).
Hedge fund activity in QuinStreet Inc (NASDAQ:QNST)
Heading into the fourth quarter of 2016, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, flat over the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in QNST over the last 5 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.
According to Insider Monkey’s institutional investor database, Private Capital Management, led by Gregg J. Powers, holds the biggest position in QuinStreet Inc (NASDAQ:QNST). Private Capital Management has a $16.6 million position in the stock, comprising 2.4% of its 13F portfolio. The second most bullish fund manager is Royce & Associates, led by Chuck Royce, which holds a $14.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish encompass Renaissance Technologies, one of the largest hedge funds in the world, D. E. Shaw’s D E Shaw and Jose Fernandez’s Stepstone Group. 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.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as QuinStreet Inc (NASDAQ:QNST) but similarly valued. We will take a look at Ocean Rig UDW Inc (NASDAQ:ORIG), Twin Disc, Incorporated (NASDAQ:TWIN), Talend SA ADR (NASDAQ:TLND), and YuMe Inc (NYSE:YUME). All of these stocks’ market caps are closest to QNST’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ORIG | 8 | 10427 | -3 |
| TWIN | 7 | 16632 | -1 |
| TLND | 7 | 14402 | 7 |
| YUME | 9 | 13593 | -2 |
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $38 million in QNST’s case. YuMe Inc (NYSE:YUME) is the most popular stock in this table. On the other hand Twin Disc, Incorporated (NASDAQ:TWIN) is the least popular one with only 7 bullish hedge fund positions. QuinStreet Inc (NASDAQ:QNST) 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 YUME might be a better candidate to consider taking a long position in.
Disclosure: None
