You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
In this article, we are going to take a closer look at what smart money investors think about Apptio Inc (NASDAQ:APTI). The stock went public at the end of September and as of the end of the third quarter, 14 funds from our database amassed long positions in the company. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Meridian Bioscience, Inc. (NASDAQ:VIVO), Blueprint Medicines Corp (NASDAQ:BPMC), and Getty Realty Corp. (NYSE:GTY) to gather more data points.
Follow Apptio Inc (NASDAQ:APTI)
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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.
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Now, let’s take a look at the recent action encompassing Apptio Inc (NASDAQ:APTI).
How are hedge funds trading Apptio Inc (NASDAQ:APTI)?
As stated, earlier, at the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey held shares of Apptio. Let’s take a closer look at some funds that amassed the largest positions in the company at the end of September.
When looking at the institutional investors followed by Insider Monkey, Millennium Management, one of the largest hedge funds in the world, holds the largest position in Apptio Inc (NASDAQ:APTI). Millennium Management has a $1.7 million position in the stock, comprising less than 0.1% of its 13F portfolio. On Millennium Management’s heels is Ken Griffin of Citadel Investment Group, with a $1.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions comprise Anand Parekh’s Alyeska Investment Group, Bain Capital’s Brookside Capital and Rob Citrone’s Discovery Capital Management. 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.
On the following page, we’ll see how Apptio’s popularity among smart money investors compares to other stocks with similar market values.
Let’s check out hedge fund activity in other stocks similar to Apptio Inc (NASDAQ:APTI). We will take a look at Meridian Bioscience, Inc. (NASDAQ:VIVO), Blueprint Medicines Corp (NASDAQ:BPMC), Getty Realty Corp. (NYSE:GTY), and Avianca Holdings SA (ADR) (NYSE:AVH). This group of stocks’ market caps are similar to APTI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VIVO | 16 | 61352 | -3 |
| BPMC | 16 | 195024 | 4 |
| GTY | 9 | 37335 | 1 |
| AVH | 5 | 2377 | 5 |
As you can see these stocks had an average of 12 funds with bullish positions and the average amount invested in these stocks was $74 million. That figure was $11 million in APTI’s case. Meridian Bioscience, Inc. (NASDAQ:VIVO) and Blueprint Medicines Corp (NASDAQ:BPMC) are the most popular stocks in this table. On the other hand Avianca Holdings SA (ADR) (NYSE:AVH) is the least popular one with only five funds holding shares. Apptio Inc (NASDAQ:APTI) 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, VIVO might be a better candidate to consider taking a long position in.
Disclosure: none
