It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Actua Corp (NASDAQ:ACTA).
Hedge fund interest in Actua Corp (NASDAQ:ACTA) shares was flat at the end of last quarter, with 8 hedge funds bullish on the company. This is usually a negative indicator. At the end of this article we will also compare ACTA to other stocks including SciClone Pharmaceuticals, Inc. (NASDAQ:SCLN), XO Group Inc (NYSE:XOXO), and General Communication, Inc. (NASDAQ:GNCMA) 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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What have hedge funds been doing with Actua Corp (NASDAQ:ACTA)?
Heading into the fourth quarter of 2016, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from one quarter earlier. On the other hand, there were a total of 7 hedge funds with a bullish position in ACTA at the beginning of this year. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the most valuable position in Actua Corp (NASDAQ:ACTA). Renaissance Technologies has a $7.1 million position in the stock. Coming in second is Chuck Royce of Royce & Associates, with a $5.8 million position. Some other members of the smart money that hold long positions include D. E. Shaw’s D E Shaw, David Atterbury’s Whetstone Capital Advisors and Ken Griffin’s Citadel Investment Group. We should note that Whetstone Capital Advisors is 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.
Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that sold off their entire stakes in the stock during the third quarter. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors sold off the largest stake of all the investors studied by Insider Monkey, worth close to $0.1 million in stock, and Philip Hempleman’s Ardsley Partners was right behind this move, as the fund dumped about $0.1 million worth of shares.
Let’s check out hedge fund activity in other stocks similar to Actua Corp (NASDAQ:ACTA). We will take a look at SciClone Pharmaceuticals, Inc. (NASDAQ:SCLN), XO Group Inc (NYSE:XOXO), General Communication, Inc. (NASDAQ:GNCMA), and CSW Industrials Inc (NASDAQ:CSWI). This group of stocks’ market values match ACTA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SCLN | 20 | 64807 | 6 |
| XOXO | 15 | 130636 | -1 |
| GNCMA | 7 | 14153 | 0 |
| CSWI | 9 | 71244 | 1 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $70 million. That figure was $17 million in ACTA’s case. SciClone Pharmaceuticals, Inc. (NASDAQ:SCLN) is the most popular stock in this table. On the other hand General Communication, Inc. (NASDAQ:GNCMA) is the least popular one with only 7 bullish hedge fund positions. Actua Corp (NASDAQ:ACTA) 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. In this regard SCLN might be a better candidate to consider taking a long position in.
Disclosure: None
