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 have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider CooTek (Cayman) Inc. (NYSE:CTK) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is CTK a good stock to buy? The best stock pickers were getting more optimistic. The number of long hedge fund positions improved by 3 recently. CooTek (Cayman) Inc. (NYSE:CTK) was in 5 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 6. Our calculations also showed that CTK isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 2 hedge funds in our database with CTK positions at the end of the fourth quarter.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Donald Sussman of Paloma Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to check out the latest hedge fund action encompassing CooTek (Cayman) Inc. (NYSE:CTK).
Do Hedge Funds Think CTK Is A Good Stock To Buy Now?
At first quarter’s end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 150% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CTK over the last 23 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.
Of the funds tracked by Insider Monkey, James Thomas Berylson’s Berylson Capital Partners has the biggest position in CooTek (Cayman) Inc. (NYSE:CTK), worth close to $1.8 million, corresponding to 0.4% of its total 13F portfolio. Coming in second is Warren Lammert of Granite Point Capital, with a $0.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that are bullish include Renaissance Technologies, Donald Sussman’s Paloma Partners and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Berylson Capital Partners allocated the biggest weight to CooTek (Cayman) Inc. (NYSE:CTK), around 0.45% of its 13F portfolio. Granite Point Capital is also relatively very bullish on the stock, dishing out 0.02 percent of its 13F equity portfolio to CTK.
Consequently, key hedge funds were breaking ground themselves. Berylson Capital Partners, managed by James Thomas Berylson, created the largest position in CooTek (Cayman) Inc. (NYSE:CTK). Berylson Capital Partners had $1.8 million invested in the company at the end of the quarter. Warren Lammert’s Granite Point Capital also made a $0.4 million investment in the stock during the quarter. The only other fund with a brand new CTK position is Donald Sussman’s Paloma Partners.
Let’s also examine hedge fund activity in other stocks similar to CooTek (Cayman) Inc. (NYSE:CTK). We will take a look at Penns Woods Bancorp, Inc. (NASDAQ:PWOD), Fusion Fuel Green PLC (NASDAQ:HTOO), Neptune Wellness Solutions Inc (NASDAQ:NEPT), Processa Pharmaceuticals, Inc. (NASDAQ:PCSA), Ocean Power Technologies Inc (NASDAQ:OPTT), InflaRx N.V. (NASDAQ:IFRX), and Gain Therapeutics, Inc. (NASDAQ:GANX). This group of stocks’ market caps are closest to CTK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PWOD | 1 | 4680 | 0 |
| HTOO | 6 | 17686 | 1 |
| NEPT | 4 | 16869 | -2 |
| PCSA | 4 | 7356 | 2 |
| OPTT | 2 | 59 | 0 |
| IFRX | 17 | 42737 | 10 |
| GANX | 5 | 13575 | 5 |
| Average | 5.6 | 14709 | 2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.6 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $3 million in CTK’s case. InflaRx N.V. (NASDAQ:IFRX) is the most popular stock in this table. On the other hand Penns Woods Bancorp, Inc. (NASDAQ:PWOD) is the least popular one with only 1 bullish hedge fund positions. CooTek (Cayman) Inc. (NYSE:CTK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CTK is 45.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately CTK wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CTK investors were disappointed as the stock returned -36.1% since the end of March (through 6/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
