Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the fourth quarter of 2018 we observed increased volatility and small-cap stocks underperformed the market. Things completely reversed during the first quarter. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards COMSCORE, Inc. (NASDAQ:SCOR) to find out whether it was one of their high conviction long-term ideas.
Is COMSCORE, Inc. (NASDAQ:SCOR) a buy right now? Money managers are in a bullish mood. The number of bullish hedge fund positions advanced by 2 in recent months. Our calculations also showed that SCOR isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Didric Cederholm of Lion Point Capital
We’re going to take a gander at the key hedge fund action encompassing COMSCORE, Inc. (NASDAQ:SCOR).
How are hedge funds trading COMSCORE, Inc. (NASDAQ:SCOR)?
At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the fourth quarter of 2018. On the other hand, there were a total of 2 hedge funds with a bullish position in SCOR a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
The largest stake in COMSCORE, Inc. (NASDAQ:SCOR) was held by RGM Capital, which reported holding $83.9 million worth of stock at the end of March. It was followed by Bares Capital Management with a $64.6 million position. Other investors bullish on the company included Lion Point, Royce & Associates, and GAMCO Investors.
As industrywide interest jumped, key money managers have jumped into COMSCORE, Inc. (NASDAQ:SCOR) headfirst. Millennium Management, managed by Israel Englander, established the biggest position in COMSCORE, Inc. (NASDAQ:SCOR). Millennium Management had $10.8 million invested in the company at the end of the quarter. Jeffrey Moskowitz’s Harvey Partners also made a $1.9 million investment in the stock during the quarter. The other funds with brand new SCOR positions are Paul Tudor Jones’s Tudor Investment Corp and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as COMSCORE, Inc. (NASDAQ:SCOR) but similarly valued. We will take a look at WillScot Corporation (NASDAQ:WSC), Editas Medicine, Inc. (NASDAQ:EDIT), FormFactor, Inc. (NASDAQ:FORM), and Kearny Financial Corp. (NASDAQ:KRNY). This group of stocks’ market caps are closest to SCOR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WSC | 22 | 131621 | -2 |
| EDIT | 15 | 107651 | -3 |
| FORM | 11 | 51910 | 1 |
| KRNY | 16 | 150468 | 1 |
| Average | 16 | 110413 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $110 million. That figure was $270 million in SCOR’s case. WillScot Corporation (NASDAQ:WSC) is the most popular stock in this table. On the other hand FormFactor, Inc. (NASDAQ:FORM) is the least popular one with only 11 bullish hedge fund positions. COMSCORE, Inc. (NASDAQ:SCOR) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately SCOR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SCOR investors were disappointed as the stock returned -59.3% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
